5 last-minute income tax filing tips to save you money and stress
The moment of truth is nearly upon those of us who waited to file our federal income taxes.
Yes, this year the tax deadline is April 17 instead of the 15th — offering serious procrastinators a little reprieve. But the longer you wait, the more you increase the chance of making a mistake under pressure.
Here are a few tips for meeting the deadline confidently and accurately.
Gather your income and deduction information before you sit down. Know the Social Security numbers for yourself, your spouse if filing jointly and your children if claiming dependents. Look at last year’s return and make sure you have the documents to support any of the same claims you plan to make this year.
A few examples:
Income: You’ll need W-2s and 1099s for income, including Form 1099-INT for interest earned on a bank account. (Or, if you were lucky, a W-2G for winning the lottery or a big poker tournament.) Missing a W-2? The IRS can help you get missing documents online. Or, call the agency at 800-829-1040.
Deductions and credits: If you’re itemizing, you’ll want Form 1098, Mortgage Interest Statement, for deducting interest paid on a loan for your own home. Also, collect receipts for purchases and payments for business, health care, education, charitable donations, child care, retirement savings contributions and other items.
Did you buy health insurance through one of the state or federal insurance exchanges created under Obamacare? If so, you should have a Form 1095-A to calculate the amount of your premium tax credit so you can reconcile it with any advance payments applied to your premiums on Form 8962.
RELATED: States where Americans pay the highest in state income taxes
Pick a preparer
Decide who’s going to file your taxes — you or a professional tax preparer.
If you made $54,000 or less last year — or meet other qualifications — you may qualify for free in-person preparation of basic tax forms through the Volunteer Income Tax Assistance (VITA) program. The IRS Free File website also offers brand-name software for those whose income is less than $66,000. For those with income of more than $66,000, the IRS offers free online filing.
If you need help finding a preparer or want to know the status of your refund, check through the IRS website.
If you need in-person help, accountants and other tax preparation offices are available. In many cases, they are open late as the filing deadline looms.
For more ideas, check out: “Tax Hacks 2018: How to Get the Right Tax Pro at the Right Price.”
Even though you only have a few days left to file, don’t rush! Mistakes can be costly and delay any refund you might be due, the IRS warns. Here are the most common errors for last-minute filers, as compiled from the IRS and tax preparation services and professionals:
- Basic errors: Such mistakes include entering wrong Social Security numbers for yourself, a spouse or dependent children; misstating an address or a filing status; checking the wrong exemption boxes; and listing the incorrect bank routing numbers for direct deposit of refunds. On paper returns, mistakes include making math errors, misreading tax tables, leaving off signatures and dates on forms, failing to attach all needed forms to the 1040, and sending forms to the wrong IRS processing centers.
- Income: Don’t forget dividends, state tax refunds, unemployment payments and earnings from side jobs or freelance work. If the IRS discovers you left any of these out, you may owe penalties if the income increases the tax you owe.
- Deductions and credits: For itemizers, remember to include state and local income taxes paid, real estate and personal property taxes paid and miscellaneous business expenses. Even if you don’t itemize, do not ignore “above the line” deductions for educator expenses, health savings accounts and tuition and fees. The Earned Income Tax Credit also is underclaimed.
Lower your bill
Three things you can do by April 17 to lower your tax bill:
- Contribute to your self-employed 401(k)
- Contribute to your IRA
- Contribute to your health savings account (HSA)
For more information, check out “3 Key Deadlines for Retirement Plans” and “You’re Almost Out of Time to Stash Cash in This Tax-Free Account.”
Don’t sweat the deadline
Despite what we’re used to hearing, the April 17 (usually April 15) deadline applies only if you owe. But if you’re getting money back, it doesn’t make sense to delay your refund.
If you can’t get your taxes done by April 17, you can file for an automatic extension with Form 4868, which usually gives you an extra six months. Just keep in mind that the extension only applies to filing your return, not paying what you owe. The government wants your tax dollars by April 17.
What’s your approach to filing taxes? Share with us in comments below or on our Facebook page.
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