If you've waited until the last minute to file your taxes, you're not alone. The IRS estimates that 20% to 25% of tax filers submit their returns during the last two weeks of the tax season. If you're up against the clock as the April 18 filing deadline looms, here are a few tips you can use.
1. Figure out whether you have all of your paperwork and documentation
If your return is relatively uncomplicated, and it's mostly a matter of copying numbers over from a W-2 and some 1099 forms, then you shouldn't have a problem filing at the last minute -- provided you have that documentation in place. While employers rarely neglect to send out W-2s, 1099s are a different story. Before you drive yourself crazy to get your return filed in time for the deadline, make sure you actually have the appropriate paperwork on hand. If you don't, you'll have no choice but to postpone your filing, which leads to my next tip...
2. Request an extension
Filing a last-minute tax return isn't always feasible. Even if you do have all of your paperwork available, rushing through the process increases your likelihood of making a mistake, which, in turn, raises your audit risk. If you come to realize you just plain need more time to file your taxes, you can buy yourself an extra six months by requesting a tax extension by the April 18 deadline. Keep in mind, however, that if you owe money on your taxes, you'll still need to pay them by April 18 to avoid penalties.
Now you may be thinking: "How can I pay my taxes if I haven't calculated my final bill?"
It's a valid question, and the best answer I can give you is to come up with a rough estimate and start making payments. Otherwise, you'll begin accruing interest on the amount you owe the minute the original filing deadline passes.
Another thing to remember is that if you owe the IRS money and don't file a tax return or request an extension by April 18, you'll be hit with a failure to file penalty, which can be 10 times greater than the penalty for simply paying your taxes late. If you're thinking of ignoring the original deadline because you don't have your paperwork ready and you don't have the cash on hand to pay your tax bill, at the very least, get that extension in place so you don't end up facing a higher penalty.
3. File electronically
You know those people who line up at the post office and spend hours waiting to get their returns out in time? They're making the process unnecessarily stressful. If you're down to the wire, you're much better off filing your return electronically and eliminating much of the hassle.
There are a number of benefits to filing electronically. First, if you avoid paper, you're less likely to make a mistake. The IRS reports that the error rate among electronically filed returns is less than 1%, whereas it's a whopping 21% for paper returns. Furthermore, if you file electronically and are due a refund, you'll usually get it in three weeks or less. (Filing electronically and signing up for direct deposit can expedite the process even more.) Paper filers, meanwhile, typically have to wait six to eight weeks to see their refunds.
Filing electronically can also come in handy if you do happen to be rushing through the process a bit, because most of today's software is equipped to not only identify deductions and credits you might be eligible for, but alert you to audit red flags on your return. Though I'd recommend that everyone file electronically, it's an especially good idea if you're pressed for time. Best of all, if you earn less than $64,000 a year, the IRS let you file electronically for free.
If you're staring down the tax filing deadline with your work cut out for you, remember that it is possible to complete a tax return in a relatively short amount of time. So rather than bemoan your procrastination, focus on getting the job done. With any luck, you'll learn from your mistakes and start the process much earlier next year.