Wednesday, October 17, 2012

File and Amend - Getting My Tax Refund Sooner

For our 2011 tax return, I knew we were going to get a really big tax refund.  That's become most of my income had to be withheld at a 25% tax rate, which was far above our actual tax rate.  However, I didn't file our tax return until September 2012, since I had to do some additional tax research.   Fortunately, the lost interest for the extra 5-7 months is about zero.  

For our 2012 tax return, I expect will get a similarly large tax refund.  There will also be new tax information for which I will need to do more research.  However, I won't let the delay cause me to get all of my tax refund later.   That's because I can file a simple return by April 15, with only income, standard deduction, and simple credits, to get the majority of my refund.   After that, I have three years to amend return to include the more complex elements, such as itemized deductions, K-1 information and additional tax credits, to get the balance of our refund.

I expect that I can get at least 70% of our Federal refund and 95% of our State refund by April 15.   Then I can work to get the balance after I complete my tax research on the remaining items.  Although there is a three year window to file an amendment, I will still target to complete the amendment by October 15, which is the deadline for an extended return.

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

This is not financial or tax advice. Please consult a professional advisor.

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