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10 last-minute tax filing tips

Tax frustration_2017-04-17 15.16.56
If you've put off your tax filing until this last week before Tax Day, don't panic. You've still got time to do the tax job right.

Tax Day is one week away! Yeah, I know. Not really a reason for celebrating, especially if you're just now tackling your taxes.

There's no way to make this final tax filing week festive. However, these 10 last-minute filing tips can help you get the job done by the April 18 deadline.

1. Determine whether you need to file.
Most Americans who earn money, be it through full-time jobs or self-employment or investment income, do have to fill out a tax return. But some don't. Make sure before you put yourself through the hassle.

Whether you must file depends on your income, filing status, age and whether you can be claimed as a dependent on someone else's return. If you're not sure whether you need to send the Internal Revenue Service a tax return, check out the tax agency's online Do I Need to File a Tax Return? online tool.

You also can find more about filing requirements in IRS Publication 17 , as well as in my post Do you have to file a tax return? Probably, and my other post on why you might want to file a tax return even if you don't have to.

2. Gather you tax documents.
OK, you have to or decided you should file. To fill out your taxes properly you need all your tax statements. This checklist helps, but here are some highlights that bear repeating.

Start with earnings data. It is, after all, called the income tax. You'll need W-2s from employers and assorted 1099 forms from any side-hustles or regular self-employment, as well as investment earning statements. Even if you didn't get an official notification of earnings, you're still responsible for reporting all your income and paying the appropriate amount of tax.

If you're self-employed, you'll also need supporting receipts for all the expenses you can claim.

For deductions and credits, you'll want to make sure you have the documentation for tax claims such as mortgage interest and tuition payments, as well the confirmation of your charitable contributions or medical expenses.

And if you made quarterly tax payments, be sure you have a record of how much you paid and when.

My post on tax statements you need to complete your filing can help you determine the documents you need to track down ASAP.

3. Decide which deduction method to use.
Your tax document will help you decide whether this tax year you'll claim the standard deduction or itemize your expenses. You'll want to use the method that gives you the best tax results.

Most taxpayers claim the standard amount, especially since 2017's tax reform law greatly increased those amounts. For 2021 returns, the standard deduction is —

  • $12,550 for individual filers, including those who are married and file separately,
  • $18,800 if you're a head of household taxpayer, and
  • $25,100 if you and your spouse file a joint tax return.

If, however, you have enough expenses to exceed your standard deduction amount, such as a lot of medical costs, then by all means itemize them on Schedule A.

4. Don't overlook tax breaks.
Regardless of which deduction amount you choose, make sure you don't shortchange yourself. Every year too many taxpayers overlook tax breaks. Don't be one of them. Check out these tax breaks that many filers overlook, as well as these 25 tax deductions available to taxpayers who itemize or take the standard deduction.

5. Don't make common mistakes.
Similarly, lots of taxpayers end up owing more because of errors on their returns. Don't join this unnecessarily large club. Double check your 1040 to ensure you don't make any of these 12 common tax filing mistakes.

6. Contribute to an IRA or HSA.
Putting money into a tax-advantaged savings account may potentially lower your tax liability. Even better, money contributed now pays off down the road.

You have until the April filing deadline to contribute to an individual retirement account, better known as an IRA, either Roth or traditional, for the prior tax year. The 2021 maximum contribution amount for either type of IRA is $6,000. You can add another $1,000 if you're age 50 or older. If your traditional IRA contribution is deductible, designating that it applies to the 2021 tax year by April 18 could reduce your tax bill.

The same deadline applies to a Health Savings Account, or HSA. This medical account can be opened fi you have a high deductible health plan, or HDHP. The HSA funds provide a tax-saving way to pay for that medical insurance's larger out-of-pocket costs. For the 2021 tax year, you can contribute up to $3,600 to your HSA if you have individual HDHP coverage.

7. File electronically.
The IRS will process your tax return more quickly if you e-file. That means if you're getting a refund, you'll see that money sooner. You'll get it even more quickly if you also tell the IRS to directly deposit your refund into a financial account.

You can file electronically in one of three ways. First, directly through the IRS with Free File or fillable forms. Second, by using tax preparation software. Third, by hiring a tax preparer who's an IRS-authorized e-filer.

8. Pay what you owe.
While the IRS wants your tax return, it also definitely wants any tax you owe. Even if you can't pay your full amount due with your 1040, pay as much as you can.

Again, the IRS recommends that you use one of its various payment options, most of which can be completed electronically.

And if your tax bill is just too large to handle in one lump sum, the IRS offers various options if you can't pay your tax bill in full.

9. File your state taxes.
Residents of 42 states and the District of Columbia also face income taxes in those jurisdictions. And most of those state returns also are due on April 18.

Texans map of the United States

The five states that have filing deadlines that don't line up with Uncle Sam's April 18 Tax Day are —

  • Hawai'i, which wants state flings by April 20;
  • Delaware and Iowa, each with a tax deadline of April 30;
  • Virginia, with a May 1 tax due date; and
  • Louisiana, which has a May 15 filing deadline.

In most cases you'll need to finish your federal return first, since states tend to use that information as a starting point for their more local taxes.

The good news for taxpayers who must file state returns, is that most states also offer free online tax filing options.

And who is lucky enough not to deal with double tax duty? In addition to me and my fellow Texans, you won't face any state income tax at all if you live in Alaska, Florida, Nevada, South Dakota, Tennessee, Washington, or Wyoming.

10. Get an extension.
If you just can't finish your 1040 and all the accompanying forms and schedules by April 18, then get six more months to do so. You can get an automatic extension that gives you until Oct. 15 to file your forms. 

It's not hard. Just file Form 4868, either electronically or by mailing the paper form so that it's postmarked April 18. 

Remember, though, as tip #8 notes you still need to pay your tax bill or as much as you can when your file your extension.

You can find more tax filing help at IRS.gov and, of course, in the ol' tax blog's monthly collections of featured tax tips.

 

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