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We're approaching the homestretch in this year's tax season, and even die-hard procrastinators are finally starting to realize that they're running out of time to get their returns filed. Even as the stress level rises, it's important to keep a few things in mind in order to do your taxes right. Below, you'll find five things that you can't afford to forget as you get your taxes done in the next couple of weeks.
1. Know the deadline.
April 15 is a date that's etched into every taxpayer's memory, but it happens not to be the deadline this year. April 15 is a Friday, but it's also the Emancipation Day holiday in Washington, D.C. Accordingly, IRS offices will be closed, and so the next available business day is April 18.
Some taxpayers actually get an extra day to file. In Massachusetts and Maine, April 18 is Patriot's Day, and so returns from those states are due on April 19.
2. Match up your income to what the IRS knows about.
One of the biggest audit risks comes when your tax return doesn't match up with the W-2s, 1099s, and other information that the IRS collects from others about your income. Computers compare your return's numbers to the totals calculated from those information returns, and if they don't match up, you can expect to get a letter from the tax man.
It's important to reconcile your return to all those tax forms you get in the mail. If one of those tax forms has incorrect information, getting the provider to correct it on an amended 1099 is the best way to avoid a tax hassle.
3. Don't overlook tax breaks.
Many taxpayers leave money on the table when they file their returns. There are so many tax breaks on the books that it can be hard to keep track of them all, but when you add them up, they can produce immense savings.
Some commonly overlooked breaks include the earned income tax credit for low- and middle-income workers, itemized deductions for state income and sales taxes and charitable deductions, and student-loan interest that parents paid on behalf of their children. Yet with dozens of breaks on the books, it can be valuable to learn as much as you can about available deductions and credits so you can take maximum advantage.
4. Figure out the best way to file.
Electronic filing has largely replaced paper returns, thanks to the convenience and speed that they give taxpayers. Especially if you're expecting a refund, e-filing can cut weeks off the time you'll wait to get money back from the government. Even if you owe money, using the electronic filing method can help ensure faster processing with fewer opportunities for errors than a paper return entails. Programs that make electronic filing free for eligible taxpayers only make it even easier to file electronically.
5. You can always get more time.
If it becomes obvious that you're not going to be able to get everything done by that mid-April deadline, then bear in mind that you always have the ability to get an extension. Six-month extensions are automatic as long as you request them, and filing IRS Form 4868 is relatively simple.
The most important thing about extensions, though, is that they don't excuse you from paying your tax on time. With the extension request, you'll need to estimate your total tax liability and pay any outstanding balance on your tax bill. If you underestimate, then you can owe interest and penalties on the amount you didn't pay on time. If you're expecting a refund, then you won't have to pay anything at all with your extension.
Tax time is a stressful period for many Americans, but you can get your taxes prepared and filed. By keeping these things in mind, you'll be more likely to have a successful experience with your tax return.
