Don't Panic: 5 Tips for Stress-Free Last-Minute Tax Returns

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BY47FM Desktop photo with a calendar showing April 15th circled and a broken pencil symbolizing frustration with income taxes. t
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It happens every year. You promise yourself that you won't wait until the last moment to file your federal tax return. But then life intrudes, and you wind up scrambling to make the deadline.

Relax. You are not alone. According to the Internal Revenue Service, 28 percent of individual tax returns are filed in the final two weeks. So take a deep breath, make yourself a calming cup of herbal tea and read these tips for last-minute filers, courtesy of the American Institute of CPAs.

1. Avoid the Last-Minute Rush

The U.S. Postal Service keeping some locations open until midnight on Tax Day -– the last possible moment to have your tax return postmarked without it being considered late -– and you can find a location with its online location tool.

Better yet, avoid the long lines and e-file your return. You can file until midnight on April 15, and there is no cost to e-file.

2. File an Extension If Needed

Individuals who need additional time should request an extension by filing IRS Form 4868, "Application for Automatic Extension of Time to File U.S. Individual Income Tax Return."

You can either mail this in or e-file it, but either way it must be done by April 15. As long as you fill the form out correctly and submit it by the deadline, an extension is automatically granted, and you have until Oct. 15 to file you returns.

3. File a Return Even If You Can't Pay Your Taxes Yet

If you expect to owe money to the IRS, you need to estimate the amount owed and either file your taxes or an extension by April 15. But even if you file an extension, that doesn't extend the date required to pay your taxes, just the date to file them.

As the IRS puts it: "The failure-to-file penalty is generally more than the failure-to-pay penalty. So if you cannot pay all the taxes you owe, you should still file your tax return on time and pay as much as you can, then explore other payment options. The IRS will work with you."

4. Make Sure Your Return Is Complete

The pressure of trying to get your taxes filed before the deadline can cause you to make some simple mistakes that can cause your return to be considered incomplete.

%VIRTUAL-article-sponsoredlinks%The IRS has the right to assign additional charges or penalties when a person files incomplete or incorrect tax paperwork, though it usually only does so when the mistake leaves the individual owing money.

In any case, don't take any chances. Take a few minutes to review your returns to make sure you have filled in all requested information (such as Social Security numbers), attached all required forms and supporting documents and signed and dated your returns.

5. Don't Stick Your Head in the Sand

So let's say you totally blow it -- you owe taxes and you missed the filing deadline. What should you do next? Whatever you do, don't ignore the problem -- it won't go away.

First off, file and pay as soon as you can to minimize any penalty and interest charges (there is no penalty for filing a late return if you are due a refund). And if you owe tax but can't pay it all at once, you should pay as much as you can when you do file.

If you need more time to pay your federal income taxes, you can request a payment agreement with the IRS. Use the IRS Online Payment Agreement Application tool or file Form 9465, Installment Agreement Request.

No man is an island, or even a peninsula, so I encourage your feedback in the comments below. And don't forget to pick up my book, "Trading: The Best of the Best -- Top Trading Tips for Our Time."

Don't Panic: 5 Tips for Stress-Free Last-Minute Tax Returns

Taxpayers may forget that donations they gave last year may get them a bigger refund. If you cleaned out your bulging closet and dropped off clothing or household goods at your favorite charity, this may be deductible on your tax return.

Taxpayers taking a full course load and working toward a degree can receive education benefits through the American Opportunity Tax Credit for college expenses. But even those who just took one class to further their career may be able to take the tuition and fees deduction. With this credit, you can deduct up to $4,000 for tuition and fees, books and educational supplies for you, your spouse or your dependents.

Taxpayers can deduct state income taxes, but what about residents of states that don't have a state income tax? In this case, the state and local sales tax deduction is especially useful because these taxpayers can deduct sales tax paid on purchases. Even people who live in states that pay state income tax can benefit if they paid more sales tax due to large purchases.

The earned income tax credit is a refundable tax credit given to filers who earn low to moderate income from their jobs. The credit can be worth up to $6,044, depending on your income and how many dependents you have, but one in five tax filers overlook this opportunity, according to the Internal Revenue Service. You must file your taxes to get it, so even if you make less than $10,000 (the minimum income filing requirement), you should still file your taxes.

If you were looking for a job last year, you may be able to deduct costs related to your job search -- even if you didn't secure a job. Job search expenses such as preparing and sending resumes, fees to placement agencies and even travel related to the job search can be included.

This credit is often overlooked and seldom talked about. If you have an income up to $29,500 ($59,000 for married filing jointly), you can save for retirement and get a tax credit worth up to $1,000 for individuals and $2,000 for couples if you contributed to a qualifying retirement plan such as an individual retirement account or 401(k). The retirement saver's tax credit is a win-win situation since contributions to your IRA may also be a deduction from income.

Taxpayers who weren't so lucky gambling last year should know that losses can be deducted if they itemize their deductions. However, your amount of losses cannot surpass your winnings, which must be reported as taxable income. For example, if you have $2,000 in winnings and $4,000 in losses, your deduction is limited to $2,000. Make sure to collect documentation such as receipts, tickets and other records to support your losses.

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