Don't Mess With Taxes

Daisies enjoying the result of an April shower. (Photo by Kay Bell)

Tax Day is almost here, no fooling!

We've readjusted, after the COVID-19 pandemic delays, to having Tax Day fall in the middle of this fourth month. This year, it's officially April 15 again for most of us.

So filing our return or extension request by then obviously is a prime focus. But there are some other tax matters to consider or complete this April 2024. Here are six.

1. Finish (or start) your 2023 return. Tax Day is just 14 days away, and the Internal Revenue Service is waiting on literally millions of returns. If you're among these later filers, don't panic. You still have plenty of time to finish that Form 1040.

If you started filling out your tax return earlier this year, then set it aside, give that work another look now. And if you haven't started the filing process at all, but plan to file yourself, get on it.

The smartest way to accomplish this annual tax task is filing electronically. You have lots of tax prep software options that will help you do that. Some of them are free.

There is, of course, Free File, the no-cost online tax preparation and e-filing program offered by the IRS and its tax software industry partners in the Free File Alliance. This year, eight tax software companies are offering Free File programs to taxpayers with 2023 adjusted gross income (AGI) of $79,000 or less.

Filers who have relatively simple returns and live in one of 12 states also should check out Direct File. This is the IRS' own online tax preparation and e-filing option. The pilot program is available to qualifying taxpayers in Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington, and Wyoming.

2. Get more time to finish your 2023 return. If finishing up your return, by hand or electronically, is just too overwhelming, file for an extension. The IRS is happy to give you six more months to complete your annual tax task.

Why is Uncle Sam's tax collector so generous? The IRS would much rather get your Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return, by the April 15 deadline than deal with an error-ridden return you submitted in a last-minute filing frenzy.

Form 4868 will get you six more months, until Oct. 15, to file your accurate paperwork. But remember that you don't get until mid-October to pay any tax you owe. You must pay that amount or, per the form's instructions, "as much as you can" when you send in your extension request.

See more tax forms and more about them at Tax Forms 2024.

As you can see from the Form 4868 image above, it reminds you of that requirement with its "Amount you're paying" notation on line 7.

3. Pay, or make arrangements to, any 2023 tax you owe. Speaking of paying a tax bill, of yours is surprising large this year, you need to start looking into ways to cover the amount now.

One option is paying your tax bill over time. The IRS itself offers a variety of payment plan options.

Installment payments will cost you a little more in interest and, in some cases, application fees, and you'll avoid late- or non-payment penalty charges. More importantly, a payment plan will keep the IRS from coming after you for tax evasion.

Another payment option is putting your due tax on a credit card. This could be a good move if you earn rewards for charges. But note that if you can't pay off your plastic balance quickly, you'll face interest charges that typically are much higher than IRS installment plans or some private lenders charge.

4. Make your first 2024 estimated tax payment. I know, estimated taxes are a major pain in the backside. But if you don't make them on income that's not subject to withholding and then end up owing the next filing season, you could face underpayment penalties and interest charges.

If you're self-employed, either full-time or via occasional gig work, you need to make estimated tax payments. The same is true if you get investment earnings or hit a lottery jackpot or other gambling payout.

So as you're working on your 2023 taxes, make sure you run your expected 2024 tax year numbers, too. Then make the first of these four extra tax payments for the current tax year on April 15.

Yep, estimated tax for the first quarter of the year is due on the same April day as your tax filing deadline for the previous tax year. I know. Conveniently annoying.

And sorry, there's no extension for estimated taxes.

5. Contribute to your IRA. The IRS offers tax breaks for several retirement plans.

Even better, in some cases the money you put into them can help cut your tax bill, most notably as a traditional IRA deduction on your current return and/or the Saver's Credit, which is a dollar-for-dollar offset of any tax you owe.

Best of all, there's still time to put money into IRAs, both Roth and traditional versions, and have the contribution count toward the prior tax year. Tax laws allows you to add to these accounts up through the next year's Tax Day. That's April 15 this year.

As noted, if it's a traditional IRA, you might get an immediate tax deduction.

But even if you have a Roth IRA, which doesn't qualify for a tax deduction since you put already taxed money into this type of IRA, contributing to this account still is a smart move. Maxing out your retirement savings each year, whether Roth or traditional, can make a big difference to your nest egg when you eventually retire.

And the Roth money does count toward the Saver's Credit claim, which is available to lower- and middle-income filers.

6. File your state taxes, too. Most Americans also must file some type of state (and possibly local) tax return. Since states filings typically rely on federal filing data, most state tax collectors also tend to follow the IRS' filing deadline schedule. So most, but not all, states require those returns by April 15, too.

Check with your with your state's tax department to confirm its deadline for regular tax return filing.

If you need more time, also confirm your state's filing extension requirements. In some cases, you don't have to do anything as long as you file for a federal extension. Others state tax collectors, though, could require you at least give them notice that you'll be sending in the forms a bit late.

If a tax professional handles your return, that preparer will take care of your state/local filing. The same is true if you use tax software, either a product you buy or access online or available via Free File or Direct File.

And if for some reason you don't file your state return at the same time you do your federal taxes, you still might be able to do so at no cost. Most of the states that require their residents to file returns offer their own free online tax filing options.

More April tax moves: These five April tax tasks focus on finishing up 2023 tax returns. That's because that's the biggest current concern of tax filing procrastinators, as well as IRS staff that must process them.

But if you've already filed, or are in good shape to meet the April 15 deadline, you can find some additional April Tax Moves in the ol' blog's right column. As is the custom, these monthly pieces of tax advice are listed under the countdown clock that's keeping track of the countdown to Tax Day 2024.

Yes, there still are of monthly moves that focus on April 15. But there are some general tax tidbits, as well as tax actions to take once you've filed your returns. Wherever you are on the tax filing season spectrum, thanks for taking a few minutes to peruse them.

If you're still working on your 1040, hang in there. You can find help finishing up in the just-posted, but soon to increase list of April tax tips, as well as the similar tax advice collections for January, February, and March.

And if you've met your annual filing obligation, please accept my envy-infused congratulations.

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