Did you wait to file taxes this year? Youâ€™re in good company. The IRS estimated approximately one-fifth of filers waited until April to file their tax returns in 2016. Thatâ€™s nearly 30 million people. When Ben Franklin listed two things in life that are certainâ€”death and taxesâ€”he apparently also should have added procrastination to that list. Since thereâ€™s no denying the inevitability of taxes, try these last-minute tax tips to get you through.
Before you begin your taxes, spend time gathering all of the necessary documents. While the exact documentation and information each filer needs depend on your particular situation, there are five categories to consider:
- Personal information, like Social Security numbers
- Income information, like W-2 and 1099 forms
- Income adjustment information, like mortgage interest and student loan interest
- Credit and deduction information, like education costs and childcare costs
- Direct deposit information, like routing and account numbers.
Whether you are filing taxes yourself or having them prepared by someone else, having access to all of this information will expedite the process.
Top Off Contributions
Before you file, you may want to contribute to your Individual Retirement Account (IRA) or your Health Savings Account (HSA). In addition to allowing your retirement fund contributions to grow tax-deferred, contributing to a traditional IRA before the tax deadline can also lower your tax bill.
You may also consider maxing out your HSA if you have a qualifying High-Deductible Health Plan (HDHP). Earnings in an HSA accumulate tax-free, and when using money from your HSA to pay for qualified expenses, the balances can be withdrawn tax-free. Additionally, HSA balances carry over from year to year. Contributing to one or both of these accounts can certainly be a smart tax move.
When time is of the essence, it is tempting to choose speed over accuracy. However, this is one instance where cutting corners can cost you dearly. The IRS currently has six years or more to audit returns. Though anyone can be audited, it is usually tax returns that have mathematical mistakes, missing forms or numeric outliers that draw red flags for review.
Other common mistakes you will want to avoid include incorrect Social Security numbers, inaccurate bank account numbers, errors in tax credits or deductions or even using names that do not match the spelling on Social Security cards. Filing your tax return is definitely one instance where it pays to double check.
Use Your Resources
There is an abundance of information available online. The Internal Revenue Service has a comprehensive website. Most tax preparation companies have entire websites devoted to frequently asked questions. A quick online search will turn up all kinds of articles and blog posts.
But if you really want accurate tax information or do not feel comfortable filing your own taxes, make sure you consult a tax professional for help. Depending on your income or other circumstances, you may also qualify for free tax return preparation by IRS-certified volunteers.
Whether you qualify for a free e-file from the IRS or plan to enlist help, filing online is faster and can also be more convenient and secure. For assistance when you file, you can use tax preparation sites, commercial software or even meet in-person with an authorized e-file provider. If you are expecting a refund, you can expect to receive it in as little as eight business days via direct deposit when you e-file.
Consider an Extension
If you cannot file your tax return by the deadline, you will want to submit a request for an extension and follow the steps to complete the proper extension paperwork. If approved, that will give filers until October to complete their tax returns. However, if you owe taxes and do not pay by the original deadline, you will not be able to avoid interest or late-payment penalties. These interest charges grow each month your taxes are not paid.
Donâ€™t Be Fooled
Scammers are out in full force during tax season, resulting in both tax fraud and identity theft. If you are consulting online resources or filing online, make sure the websites you are relying on are legitimate and secure sites. For instance, there are multiple sites with IRS in the name, but there is only one official Internal Revenue Service site. Additionally, there are a multitude of phone and online phishing scams where people prey on vulnerable people by delivering urgent-sounding messages. It pays to be skeptical. Even if you are filing at the last minute, you havenâ€™t done anything wrong. When in doubt, visit the Tax Scams/Consumer Alerts on the IRS site.
Get a Jump on Next Year
If you find yourself filing your taxes with only weeks to spare before the deadline, donâ€™t fret. Get organized, file your return online and be on guard against scams will help you make the most of the time you have left before taxes are due this year. And you’ll get a helpful head start for the next tax season so you won’t have to scramble to file next spring.
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