Many Americans kick off tax season with high hopes of getting their returns done well ahead of the deadline. But often, procrastination gets the better of us, so if you've yet to start working on your tax return, now's the right time to get moving. The filing deadline is only a month away.
This year, filers get until April 17 to submit their 2017 returns. The reason we get an extra couple of days is that April 15, the usual deadline, falls on a Sunday. Normally, this would cause the deadline to get pushed to April 16, but since that Monday is Emancipation Day, a legal holiday in Washington, D.C., we wind up with an extra two days to get our returns in.
So what happens if you miss the deadline? If you don't owe the IRS any money, nothing much (though you'll have to wait longer to get your refund). On the other hand, if you underpaid your taxes in 2017, you'll face a steep penalty for not submitting your return on time. With that in mind, here are a few late-season tips to help you avoid losing money -- and sleep.
1. Make sure you have all of your paperwork
If you're a salaried worker with no other income and are planning to take the standard deduction on your return, then you probably won't need much paperwork to file your taxes other than your W-2. But if you're planning to itemize on your return, you'll need a host of documents to ensure that the information you provide the IRS is accurate. These may include:
- 1099 forms listing various types of income you may have received
- Your mortgage interest statement, if you're a homeowner
- Your student loan interest statement, if you made payments on a loan last year
- Records of charitable contributions you made
- Records of your medical spending
- Records of retirement plan contributions
- Records of child care expenses
- Records of unreimbursed work expenses
- Records of alimony payments
Some of this information may not be so easy to come by. For example, if you know you received dividend income but are missing a 1099 reporting that figure, you'll need to chase the numbers down. Similarly, if you made some charitable donations by credit card and others in cash, you'll need to dig up receipts to claim that deduction accurately. The point here is that rounding up all of this information might take more time than you think, so if you haven't begun gathering it, now's the time to get moving.
2. Seek help immediately if your return is complicated
If your return is pretty straightforward, there's no need to pay a tax preparer to file it for you. But if your tax situation is complicated -- say, you own a small business or have lots of income and deductions from various sources -- then you may be better off paying a reasonable fee and outsourcing the task.
There's nothing wrong with enlisting outside help for your tax return, but if that's the route you want to go, start seeking out recommendations immediately. At this stage, a lot of the good tax preparers are already booked, and you may need to beg someone to squeeze you in -- but if you act quickly, you're still likely to find someone, even if he or she isn't necessarily your first choice.
3. If need be, request an extension
If you run into hiccups with locating the right paperwork or finding a tax preparer to take you on, and you find that the deadline is looming, then you might assume you have two choices: do your best with your return, even if it means risking a mistake, or submit your return after the deadline. Well, there's actually a third option, and it's one you should strongly consider exercising in this sort of scenario: requesting a tax extension.
Though a tax extension won't give you more time to pay your tax bill, it'll buy you an extra six months to submit your return to the IRS. This means that if you underpaid your taxes in 2017, you won't face a penalty for filing that return late. It'll also give you an opportunity to gather the documentation you need and find a tax professional, as many tax preparers free up once the deadline passes.
Even though a month might sound like a lot of time, the tax filing deadline will be here before you know it. The sooner you get started on that return, the more options you'll have for getting it done smoothly.
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