8 Tips for Down-to-the-Wire Tax Filing

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Hand with stopwatch on tax form and budget
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By Teresa Mears

Time never flies as fast as it does when Tax Day is approaching. If April 15 is bearing down on you and your tax life is still a muddled mess of documents and figures, it's time to buckle down and make a plan.

If your tax life is simple and straightforward -- income from one employer who gives you a W-2 and the standard deduction -- you can probably do your own tax return online.

If your tax life is complicated enough that you need an accountant, it's too late to start looking for one this year and still expect to file by the April 15 deadline. But all is not lost. Anyone who wants can get a filing extension, to Oct. 15, just for asking. This is your best bet if you're a last-minute filer who needs professional help to complete your return.

The advent of online tax filing has ended the last-minute mad dash to the post office for most tax filers, says Kelly Phillips Erb, a tax attorney in southeastern Pennsylvania. More than 80 percent of Americans filed their tax returns electronically last year, either themselves or via tax preparers, according to the Internal Revenue Service.

"If you're just looking for the easy, fast way to file, the IRS is certainly encouraging that this year," Erb says.

While the IRS will gladly give you an extension of the filing deadline, you don't get an extension on the deadline to pay. %VIRTUAL-article-sponsoredlinks%If you think you owe taxes, you're expected to estimate the amount due and send it to the IRS by April 15. If not, you'll pay a penalty for paying late.

The IRS accepts credit cards, but that's an expensive payment option because the taxpayer is required to pay the fees charged by the credit card company, which can be up to 2.35 percent. You're better off paying by check or electronic funds withdrawal online.

If you can't pay what you owe, don't stick your head in the sand, Erb advises. Reach out to the IRS and ask for an installment agreement, or hire a professional to negotiate for you. "People need to not be scared of the installment agreement," Erb says. "You don't want to just ignore the IRS because that ticks them off."

Here are eight tips for last-minute tax filers:

Get an extension. With taxes, it's better to be right than early. If you don't have time to do your taxes properly or you need to find professional help, ask for more time. You can get a six-month extension just by filing form 4868, giving you until Oct. 15 to file. You must still estimate the amount you owe and send it in by April 15.

File your taxes free. See if you can file free online. One of the best options is the IRS Free File program, which works with commercial tax software companies to create free online filing tools for taxpayers who earned less than $58,000 in the previous year. If your annual income exceeds the limit or you otherwise don't qualify for the free filing programs, you can still file your federal income tax return online using free fillable forms from the IRS.

Get free tax help. The IRS has a Volunteer Income Tax Assistance program, and AARP and local community groups also offer free help. Most of these programs are for people whose returns are relatively simple, and some have income or age limits. If you plan to take advantage of these groups, do it sooner rather than later because some close before April 15.

Open or contribute to an individual retirement account. You can make 2013 contributions to a regular or Roth IRA, Coverdell Education Savings Account or Simplified Employee Pension IRA through Tax Day. If you don't already have an account, get moving because sometimes opening an account and transferring money takes several days.

Find the money to pay what you owe. The IRS is serious about payment deadlines. You can pay by credit card, but that will cost you 1.87 percent to 2.35 percent in fees, depending on the service provider. If you can't pay what you owe, ask the IRS for an installment plan or hire a professional ­-- accountants, enrolled agents or tax lawyers are typically the best choice -- to handle that for you.

Get professional help if you need it. If your tax situation is complicated or you owe much more than you can pay, file an extension and seek professional help. The rules are complex for short sales and foreclosures, small businesses, investment losses and other issues. If any of those are mucking up your tax picture, professional assistance is probably the way to go.

Check your math and your numbers. If you make a mistake on your return, the IRS may take longer to process it or even kick it back to you. Make sure your basic information, such as your Social Security number, is correct. Double-check your math, and then double-check that you've entered the correct numbers in the correct places.

Make sure you have all the forms you need. April 15 is too late to discover that you're missing a W-2 form, the cost basis information for stocks you sold or a Social Security number for your new baby. If you're an independent contractor, you don't need to have 1099 forms from all your clients, but you do need to report all income, whether you received 1099s or not. Since the company will have sent the forms to the IRS, it's smart to make sure you have copies and declare the same number.


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8 Tips for Down-to-the-Wire Tax Filing

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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