Tax Tips

Ten hours: that's how long the average taxpayer needs to complete a return, according to the IRS. But last-minute filers generally rush through their returns, which can lead to errors, which can lead to penalties, or even audits.

To help avoid these unhappy consequences, take a look at these handy tax tips. We talked to Ernst and Young partner Andrea Markezin, who in her 19 years as an accountant has prepared thousands of returns.

Markezin, one of the authors of the 1998 Ernst and Young Tax Guide, gave us these tips:

The Devil's In The Details

• As stupid as it sounds, don't forget to sign your name and date your return.
• Write your Social Security number on every page. If the IRS misplaces a page, you won't be out of luck.
• Re-check your math. It may sound obvious, but it could save you some big problems. Saying you got a "D" in fourth-grade math won't cut it as an excuse when the auditors come calling.
• To avoid unnecessary correspondence with the IRS, attach all Copy Bs of your W-2 forms to your return. If you received a Form 1099-R showing federal income tax withheld, attach copy B of that form as well.
• If you owe money, double-check that you signed your check. Also be sure to write your Social Security number, the form number, and the tax year on the face of any IRS-bound checks.
• Be sure that your Form W-2 and all 1099s are correct. If they're wrong, have them corrected as soon as possible so that IRS records agree with the amounts you show on your return.
• Before you ship your return, make sure you have copies of all documents you send to the IRS. It's a good idea to use certified mail for all important correspondence to the IRS. Then, if you don't have a well-defined set of tax information files, use the act of filing your copied returns to get yourself started. Keeping organized records is a good first step, and an important resource if the IRS has questions about your return.

Time and Money Savers

• Here's something to remember: refunds are bad. That's right: the money you get refunded hasn't earned you any interest. It should, because it's yours in the first place. Try to adjust the amount your employer withholds on your W-4 form so that you can keep more of your money during the year.
• Consider filing electronically. E-filings halve the time it takes to get a refund, compared to sending returns through the mail.
• When you're in a last-minute panic, take a deep breath and try to get everything organized. If you're lucky, everything is already in a pile somewhere.

Marriage-Minded

• If you're getting married, and you and your betrothed make different amounts of income, you should marry in December. If the two of you make the same amount, wait until January. You'll save on your returns.
• Conversely, if you're getting divorced, you and your ex-to-be should get unhitched in Decemer if you make similar incomes. If you make different amounts, wait until January, if you can stand it. (If your estranged partner makes more, and you want revenge, then by all means, don't wait.)
• If you are married, filing separate returns instead of a joint return may save you money.

Frequently Missed Deductions

• A few deductions that are often overlooked: contact lenses, eyeglasses, and hearing aids.
• A few more deductions: cellular phones, theft losses, and alcohol and drug abuse treatment.
• Here are two facts to keep track of during the year. The cost of finding another job is deductible. Educational expenses, if they're related to your job, are deductible.
• The most obvious missed deduction: accounting fees for tax preparation and audits.

Tips For Next Year

• Keep Records. Keep Records. Keep Records. If you're not using some kind of financial records software, at least mark expenses in your datebook.
• Organize your records. If you don't keep your records systematically ("We call them shoebox people," Markezin says, a reference to the way such slobs transport their receipts), you'll end up wasting your time or your accountant's, and that'll cost you money.

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