Image: Erik Fitzpatrick, Flickr.
April 18 is right around the corner, and if you haven't filed your tax return for 2015 yet, then you're running out of time. It's easy to get caught up in the last-minute tax filing rush and forget some key details in getting your returns prepared correctly. Below, we'll run through some things to keep in mind as you race against the clock.
1. You should file even if you can't pay
Many people think that if they don't have the money to pay their taxes, they shouldn't bother filing a return. However, not filing can get you in far more trouble than filing but not paying.
The penalties that the IRS charges are designed to encourage people to file even if they can't pay. The penalty for not paying is 0.5% for every month or portion of a month that you're late in paying your taxes. However, the penalty for not filing is a much higher 5% per month or part of a month. In fact, the more you owe, the more important it is to file and avoid the much higher penalty.
2. Get the time you need
You can always get an automatic six-month extension, and the IRS has made it easier than ever. By using the Free File area on the IRS website, you can file and get your extension electronically. That's true even if your income would typically be too high to use Free File.
An extension doesn't give you more time to pay, however, so if you owe tax, you should make a payment on or before April 18 to avoid penalties. If you discover you're not going to have all the information you need to get your return done in a timely manner, then getting an extension is easy and can reduce your stress level.
3. Get help
Getting an appointment with a professional tax-preparer can be tough, but there are other resources you can use. The IRS-sponsored VITA program connects IRS-certified volunteers with taxpayers to provide free basic income-tax return preparation. VITA also allows qualified individuals to file their returns electronically, saving them time and potentially speeding up their refunds. With information about popular tax breaks, visiting a VITA site can give you the information you need to save more on your taxes.
4. It's not too late for some tax-saving moves
You'd think that the last chance for saving on your taxes for 2015 would have been at the end of 2015, but that's not the case. Some provisions let you earn tax savings even after the end of the tax year. The most popular is contributing to an IRA, which can help you qualify for a deduction of as much as $5,500 for those under age 50 or $6,500 for those 50 or older. Deductions are also still available for those who qualify to contribute to a health savings account, with the 2015 limits being $3,350 for those with individual qualifying health insurance coverage and $6,650 for those with family coverage.
5. Speed up your return -- and your refund
Filing electronically has become the norm, and it's the best move from an efficiency standpoint. You can immediately file at the last minute without having to find a post office that will stay open long enough for you to finish your returns. The IRS will be able to process your return faster, and by providing direct deposit information, your refund will get into your account far faster than if you have a paper check mailed to you. For most people, e-filing is well worth the effort.
Leaving your taxes until the last minute can be stressful, but you can still get your returns done in time. By following these tips, you'll give yourself the best chance to file on time and put another tax year behind you.
