THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Sunday, January 21, 1996 TAG: 9601190244
SECTION: CHESAPEAKE CLIPPER PAGE: 03 EDITION: FINAL
SOURCE: BY JENNIFER C. O'DONNELL, STAFF WRITER
LENGTH: Medium: 69 lines
Tax season is officially under way, and by now most employers and financial institutions have mailed their W-2 and 1099 statements to their employees and investors.
Although taxpayers have until April 15 to file their 1040 forms, Chesapeake tax preparers say waiting until the last minute to file won't be to their benefit.
``As soon as you have all your information, that's the time to file,'' said Kerry Goldmeyer, manager of the H&R Block on Battlefield Blvd. ``The sooner you start organizing your information, the more time you have to change your situation, to see if you might have more deductions than you think.''
Contrary to popular belief, tax preparers say their busiest time of the tax season is not the week before the April 15 deadline.
``Our peak period is the last week of January and the first two weeks of February,'' said Bob Barnett, general manager of eight Chesapeake branches of Jackson Hewitt Tax Service. ``People who file early are expecting refunds, and they want the money as soon as possible.''
Barnett added that taxpayers wishing to file early should reserve an appointment with their preparer or wait until the end of February to miss the early season rush.
Even if you're not expecting a refund this year, experts advise getting started early on the paperwork.
``If you expect to owe the IRS, you can still file early, but delay your payment until the April deadline,'' said Barnett.
Filing early may not lower your tax bill this year, but it could help you plan for next.
``If you owe for 1995, now's the time to make changes so it doesn't happen to you again next year,'' said Goldmeyer.
For some taxpayers, filing this year might be easier, thanks to the standard deduction.
``In the past, the standard deduction was fairly low and most people could come up with enough deductions to make it worth their while to itemize. But the IRS has raised the standard deduction enough so that some people just needn't bother itemizing,'' said Goldmeyer.
For 1995, the standard deduction ranges from $3,900 for a single person to $6,500 for a married couple, according to Goldmeyer.
To get started on the right foot this season, tax preparers offer the following advice:
Find your W-2 statements. ``Employers are required by law to mail W-2 statements to their employees by the end of January,'' said Goldmeyer. ``If you don't have yours by then, contact your employer immediately.''
Get a social security number for newborns. ``Children born before Nov. 1, 1995, must have a social security number if they're to be declared as a dependent,'' said Barnett.
Consider contributing to an Individual Retirement Account (IRA) or Self-Employment Pension (SEP). According to financial planner Robert W. Tull, an IRA or SEP account can do much more than lower your taxable income.
``It can make you wealthy,'' he said.
Tull calculates that a $2,000 contribution to an IRA or SEP account will grow to $56,204 in 35 years, assuming a 10% annual return. Contribute $2,000 annually, and your investment could be worth a whopping $596,253.
``That's the miracle of compounding,'' said Tull. ILLUSTRATION: Staff photo by MORT FRYMAN
Kerry Goldmeyer says the peak time for tax preparers is January and
February.
by CNB