Don't Mess With Taxes

If you're just now getting to work on your extended 2022 tax return, which is due to the Internal Revenue Service by Monday, Oct. 16, don't panic. These tips will help you make the most of the little tax time left. (Image courtesy Taxpayer Advocate Service, which also has some tips for Oct. 16 filers.)

It's almost Tax Day for extreme procrastinators. The extension you got for your 2022 return ends on Monday, Oct. 16.

Since the tax clock is ticking, let's get right to these eight tips that can help you complete your Form 1040 by the fast approaching, and absolutely final, tax-filing deadline.

1. Get your tax documents in order.
You know that stack of tax material you put in a drawer or box or, if you've gone digital, in an online folder? Go through it now. Make sure you have all the info you need to file. If you don't, you need to contact issuers today, either by phone or online, to get the necessary documentation. This includes 1099s, W-2s, account statements, and other items in this checklist.

If you just can't locate the tax material by now, you're going to have to file on the 16th using the best information available and then, when you do track down the final data, file a correct amended Form 1040-X. Yes, that could cost you a few more dollars, but probably not as much as a non-filing penalty.

2. Decide which deduction method to use.
Most people who put off tax filing do so because their returns are more complicated. And a lot of them still itemize instead of claiming the standard deduction. Go through your tax statements and documentation (from tip #1) again. You might find your itemizing amounts aren't what you expected.

If your planned Schedule A claims don't come to more than your standard deduction, then go with the standard amount for your filing status. That will shave time off your extended filing task.

For 2022 returns, the standard deduction is —

• $12,950 for individual filers, including those who are married and file separately,
• $19,400 if you're a head of household taxpayer, and
• $25,900 if you and your spouse file a joint tax return.

3. Don't overlook valuable tax credits.
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.

You especially don't want to miss out on tax credits. These lower any tax you owe dollar-for-dollar and, in some cases, get you a refund.

The Earned Income Tax Credit (EITC), created to help reduce the amount of tax owed for low- and moderate-income wage earners, is one that too often is ignored, especially by single taxpayers who think it's only for families. While it's true that eligible taxpayers with children get larger EITC amounts, single filers without dependents get some credit. And any amount that helps you instead of the Internal Revenue Service is worth claiming.

For 2022 returns, the maximum EITC amounts, determined by your family size, are —

• $6,935 for taxpayers filing jointly who have three or more qualifying children,
• $6,164 with two qualifying children,
• $3,733 with one qualifying child and
• $560 if you don't have any qualifying children.

As for all those taxpaying parents, there are several family-friendly tax credits.

If you're a student, or parent of one, a couple of educational tax credits, American Opportunity and Lifetime Learning, could help you recover some schooling costs.

Homeowners should check out the options available again thanks to the Inflation Reduction Act's revival of tax credits for making some common residential energy efficiency upgrades.

And if you saved for your retirement, don't forget to check out if you can claim the Saver's Credit.

4. Don't miss out on the usual tax breaks.
You say you don't qualify for any of the credits cited in tip #3? Don't be discouraged. There are lots of other tax breaks that could pay off at filing time. Check out these tax breaks that many filers overlook, as well as these 24 tax deductions available to qualifying filers regardless of which deduction method used.

And you can find more tax breaks in the ol' tax blog's monthly collections of featured tax tips.

5. Don't make common filing mistakes.
Everyone agrees that tax filing is tedious and confusing. That's why so many people put it off by getting an extension. Now, though, you've just got to gut it up and get through it, and filing an error-free 1040.

Mistakes on your return will just compound and, pardon the timing pun, extend your tax hassles. So double check your 1040 to ensure you don't make any of these 10 common tax filing mistakes.

6. File electronically.
Regardless of when you file, you should submit your return electronically. Not only will the software walk you through the process and auto-fill the appropriate related forms, it will do the math for you, which will help you avoid one of the mistakes listed in tip #5.

Once the IRS gets your e-filed 1040, it will process your tax return more quickly. That means if you're getting a refund — Yes, taxpayers who are getting refunds do sometimes delay filing until October. I don't understand it either. — you'll get 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, by hiring a tax preparer who's an IRS-authorized e-filer. If you've already done that, your tax pro is taking care of your extension as I type.

Second, you can use tax preparation software you buy for your computer or use the software companies' online versions.

Third, click on over to Free File, the IRS' online partnership with the tax software industry that lets taxpayers with adjusted gross incomes of $73,000 or less prepare their returns and e-file them, as the name says, for free. You can select from seven tax prep companies this year, and their Free File versions are available through Oct. 16.

7. Pay what you owe.
When you got your filing extension, you should have paid any tax you knew you would owe. But sometimes even our best tax guesstimates are off. If you find in finishing up your 2022 tax return that you now owe more to the U.S. Treasury, pay using one of the IRS' payment options, most of which can be completed electronically.

And if your tax bill is just too large to remit in one lump sum, the IRS offers various alternative payment options.

8. File your state taxes.
Residents of 42 states and the District of Columbia also face income taxes in those jurisdictions. Most of those states also allow residents who got federal tax filing extensions more time to file their state returns since, in most cases, states use federal filing information as a starting point for their returns.

Time is almost up for those state filings, too. The good news, though, for taxpayers who must file state returns, is that most states also offer their own free online tax filing options.

OK, that's enough. I'll let you go so you work on your 2022 tax return. If you get right to it, you should be finished in plenty of time to enjoy the coming weekend, instead of using those days to finally file your return.

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