Back in March, when the IRS extended the tax-filing deadline from April 15 to July 15, it probably seemed like you'd have plenty of time to get your return in order. But now that the deadline is rapidly approaching, you may only first be getting around to your taxes. If that's the case, here are a few tips to get you through the process.
1. Know what paperwork you need
The amount of documentation you need to file your taxes will depend heavily on whether you're claiming the standard deduction or are choosing to itemize. In 2019, the standard deduction was:
- $12,200 for single tax filers and married couples filing separately.
- $18,350 for heads of household.
- $24,400 for married couples filing jointly.
If you think you can itemize enough deductions to exceed these totals, then that's the way to go, as you'll reap the most savings. But keep in mind that itemizing will require more of an effort on your part.
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If you're claiming the standard deduction on your 2019 return, you really only need to report wage or earnings details -- those contained on your W-2 and 1099 forms. You'll also need a summary of your IRA or HSA contributions, if you made any, as well as details related to the tax deductions you can claim without itemizing.
On the other hand, if you're going to itemize, in addition to the above, you'll potentially need:
- Your mortgage interest statement
- Your property tax bill from 2019
- Receipts for charitable contributions
- Records of medical expenses
Try to figure out which route you'll be taking so you know how much legwork it will involve, and also, so that you give yourself enough time to gather all of the information you'll need.
2. Read up on available tax credits and deductions
The IRS has made a host of tax credits and deductions available to filers, and knowing which ones you're eligible for is a good way to help ensure that you reap the savings you're entitled to. The Earned Income Tax Credit, for example, is a refundable tax credit designed to assist low-income households. The Child Tax Credit, meanwhile, will put money back in your pocket if you have children under age 17 who you claim as dependents.
Meanwhile, if you're still paying off student loans, you may be eligible to deduct that interest on your tax return. And if you're self-employed, there are a number of items you can deduct, from mileage on your vehicle to the self-employment tax you paid (or should've paid) during the year. Spend some time reading up on credits and deductions. If you file your taxes electronically, you'll usually be prompted toward them anyway, but knowing which ones to look out for is still a good thing.
3. Don't wait until the very last minute to file
If you haven't yet started your taxes, you're clearly getting down to the wire. Still, at this point, the filing deadline is over a week away, which means you're better off beginning to tackle your return today than waiting even longer. If you rush through the filing process, you'll risk making a mistake that increases your audit risk or causes your tax return to get rejected.
Specifically, make sure you've entered all of your wage details correctly, and that your Social Security number is correct. Also, if you're due a refund and want it via direct deposit, make sure to enter your bank account details carefully so that money doesn't wind up in the wrong place.
Filing taxes may not be the most fun way to spend a day, but it's a task that needs to get done -- and at this point, sooner rather than later. Getting organized, figuring out which tax breaks you're entitled to, and leaving yourself time to review your work will make the process a lot less stressful.
