5 tax moves to make this April
Monday, April 01, 2019
April is the proverbial month of showers. That typically refers to the rain that falls to nourish the flowers that are predicted to arrive in May.
But this month also is known for personal precipitation. Yep, I'm talking tax-time tears.
Some folks will cry when they discover how much they owe.
Others will shed tears of frustration as they struggle to decipher the Tax Cuts and Jobs Act (TCJA) changes that affect returns for the first time this 2019 filing season.
And for others, it will be tears of joy because they planned well, have a great tax preparer or, whatever the outcome of their filing, at least they're done with taxes for another year.
Before you stock up on tissues, here are five tax moves that can help reduce your potential tax-related sobs and possibly your tax bill.
1. Get an extension to file: You've already realized that you're just not going to make the April 15 (or 17th if you live in Maine or Massachusetts) tax filing deadline. Fine. The Internal Revenue Service understands. It really doesn't want you sending in a sloppy, error-filled tax return either.
So file Form 4868 by the April deadline and give yourself six more months to get your tax act together and do it right.
2. Pay any 2018 tax you owe: That extension you just filed is great, but it only gives you more time to fill out your Form 1040 and whatever of the six new schedules you'll need to complete the job. If you owe any tax for last year, you need to send a good estimate of that amount along with your extension request.
I repeat, a good estimate. Don't send in an unrealistic amount. If you underpay, the due amount will be subject to penalties and interest that starts accruing the day after your filing deadline.
3. Make your first 2019 estimated tax payment: Believe me, estimated taxes are a major pain in the backside. The first of these four extra tax payments for the current tax year (2019) is due on the same day (April 15 or 17) as your tax filing for the previous (2018) one.
Millions of us must send the IRS estimated tax payments because we get money that isn't subject to payroll withholding. This includes not only full-time independent contracting or side gigs to supplement your wages, but also things like investment earnings and any gambling or prize winnings. If you need to pay estimated taxes and don't do so at all or in a timely fashion, you'll face interest and penalty charges.
And sorry, there's no extension for estimated taxes.
4. File your 2015 tax return: You read that date right. If you didn't file your 2015 tax return back in 2016 and were due a refund back then, this is the last chance you'll get to collect that money.
Millions of folks every year somehow overlook filing even when they're due a refund. The IRS wants to send that unclaimed refund amount to you, but you've got to ask. By law, you only have three years to do that. That means you must file a tax year 2015 Form 1040 to get that year's refund by this fast-approaching April 2019 deadline.
If you don't file this month to get your old refund, Uncle Sam gets to keep your money. Forever.
5. Don't forget your state taxes: Most Americans also must file some type of state tax return. And most of those state (and sometime local, too) tax forms follow the IRS schedule, meaning they also are due by April 15 or April 17 this year.
If you can't get your federal return done by then, chances are you won't complete your state tax forms either since, in most cases, state filings are based on what you report on your federal taxes.
In these cases, check with your state's tax office about getting an extension to file these forms, too. In some cases, you don't have to do anything. Others state tax collectors, though, could require you at least give them notice that you'll be sending in the forms a bit late.
More tax tasks: If you haven't even started yet — No judging here. My life's been crazy, too, and I haven't made as much headway on my return as I'd like. — this checklist can help you get the tax filing process going.
It highlights the necessary documents you'll need to fill out the forms, as well as notes some key filing questions you need to answer to ensure you don't overlook any tax breaks.
You'll also find some more April Tax Moves over in the ol' blog's right column. Just scroll down a bit. The list starts under the digital clock counting down the now very rapid approach of Tax Day 2019.
If you can meet that due date, good for you.
If you can't, no worries and no tears. Get an extension and do your taxes when you're truly ready (as long as that's by Oct. 15).
In the meantime, you can use your Kleenex as you catch up on the tearjerkers on your Netflix watch list.
Anthony Anderson as Dre Johnson in ABC's Blackish via Giphy
You also might find these 2019 tax filing season tips of interest:
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