There's less than a month until Tax Day 2015 so we asked three of our Motley Fool tax experts to weigh in with their last minute tax tips for this year.
Dan Dzombak: One last minute tax tip for 2015 is to make sure you submit all your forms.
Most employers and other payers had until Feb. 2 to send you your W-2's and 1099's, though in some special cases for 1099's, like with real estate sales, the due date is Feb. 17. If you received a tax form the IRS likely received the same information. The easiest way to get audited is to not submit all the tax forms that you received. For that reason, make sure you have a checklist of all the records you will be submitting to the IRS so that you do not miss anything in the moment when you go to file.
Investors need to particularly pay attention if they own any partnerships. Partnerships provide their partners with tax income information on form K-1. Stocks that likely send out K-1's include master limited partnerships, or MLPs, limited partnerships, or LPs, and some commodity ETFs. Partnerships were required to send out their K-1's to investors by March 15, a month and a half after regular tax forms. Depending on the mail, you may not have even received your K-1 yet.
If you already filed your taxes and receive a K-1 after the fact, you will have to file an amended return. If you decide not to file and hope the IRS doesn't notice, don't be surprised when you get a letter in the mail from the IRS and have to pay interest on the back taxes.
Dan Caplinger: As the tax deadline approaches, more and more taxpayers will inevitably get to the point at which they simply give up and realize that they're not going to be able to finish their returns on time. The rising complexity of the tax system, including brand-new forms dealing with the Affordable Care Act and reporting requirements for brokers that make it harder for them to get necessary information to taxpayers on time, has made getting extensions a regular event for many taxpayers.
The one thing to remember, though, is that although getting a time extension to file your tax return is a trivial exercise, it doesn't excuse you from having to pay your taxes on time. Automatic six-month extensions will give you until mid-October to get your completed returns to the IRS. But if you owe money on your taxes, you still need to pay it by April 15. If you don't, you'll owe interest on any outstanding tax balance. Moreover, if you haven't paid enough of your taxes to qualify for an exemption, you may owe late payment penalties. At just half a percent per month, though, those penalties are small compared to the 5% monthly penalty for not filing a timely return at all -- making the extension that much more important.
Jordan Wathen: The IRS isn't exactly known for giving second chances, except when it comes to retirement.
The IRS treats any contribution to an IRA before April 15, 2015 as a contribution during the 2014 tax year. Thus, any contributions made to an IRA before your tax due date will be deductible against your income from 2014, provided you are within the income limitations. This helps in three ways: First, contributions to a traditional IRA can reduce your taxes owed for last year. Secondly, many people will find that they get some of their contribution back in the form of a bigger refund shortly after filing. Finally, and most importantly, it allows you the second chance to top off the legal maximum contribution of $5,500 ($6,500 for people 50 years of age or older).
It's your one shot to go back in time and take full advantage of your individual retirement account -- make good use of it.
Dan Caplinger has no position in any stocks mentioned. Dan Dzombak has no position in any stocks mentioned. Jordan Wathen has no position in any stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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