According to the Internal Revenue Service, 28 percent of taxpayers wait until the last few weeks of tax season to file their taxes, and that adds more pressure to their tax preparers.
Putting off the tax process tends to do more harm than good for both taxpayers and preparers. Procrastinating tax filers are more liable to make careless mistakes such as forgetting to include the required information, leading to delayed refunds. Waiting until the last minute can also mean increased prices for tax prep software, and it gives criminals more time to steal a taxpayer’s identity.
“The best tip I can give is don’t procrastinate,” said Jonathan Barsade, CEO of the sales tax technology company Exactor. “That being said, though, it is very difficult to change human behavior, and procrastination is a natural characteristic of ours. The next best thing is awareness of the dangers of procrastination, not so much the danger of missing deadlines, but the danger of doing things under pressure. When we do things under pressure, that’s when we tend to make mistakes.”
Typos and miscalculations can cause problems down the road and hold up a tax refund. “It’s the silly mistakes in tax returns that tend to haunt us,” said Barsade. “It’s the math mistakes, sort of like the math mistakes that haunted us back in high school. It’s the same thing with the tax returns. It’s not adding up correctly. It’s forgetting to put in a signature. It’s mislabeling expenses and income. When we’re filling out a return under pressure, or copying the numbers from our spreadsheets under a time crunch, that’s when mistakes occur.”
He advises taxpayers and preparers to take a break, even during the last-minute crunch. “Don’t try to do everything in one go,” said Barsade. “Take a break every half hour or 45 minutes. If you feel that your eyes are glazing over, stop. If you can, have somebody double-check your numbers and entries, and cross-reference them. Be careful. In today’s day and age, when we’re filing, there are so many different forms that we need to file, and different returns going to different places. It’s very easy to misplace a tax return and insert the wrong tax return into the wrong envelope, or make the wrong payment to the wrong tax agency, or put multiple returns into the same envelope.”
Even though electronic filing has become commonplace for both taxpayers and preparers, mistakes can still occur. “If you’re using electronic filing, obviously it helps some, but not all,” said Barsade. “With electronic filing, that’s also just copying the numbers and inserting the numbers. Those are still issues.”
Procrastination can produce a domino effect from the taxpayer to the preparer.
“Even if the tax preparers aren’t procrastinating, but their clients are procrastinating, what happens is they get bombarded at the last minute with the information from their clients they need to process, and they need to process a lot of returns for a lot of clients,” said Barsade. “If you’re sitting there 16- and 18-hour days and the numbers just blur into each other, force yourself to take a break. Have somebody else from the office cross-reference, check your numbers and do the entries. You can’t afford not to.”