Don't Mess With Taxes

If you've put off your tax filing until the very last minute, don't panic. But get to work on that return or filing extension request.

Tax Day is almost here. If you’re a last-minute filer, you’re painfully aware of the dwindling filing time frame.

I don’t want to interrupt your work, but if you are looking for some suggestions on how to get the job done, here are six tips to help you finish by tomorrow, April 15.

1. Get an extension. Your wisest move at this point, even if you are close to finishing your Form 1040 and accompanying schedules, might be to get more time. You don’t want to make a mistake in your rush to be done with filing.

Instead, send the Internal Revenue Service Form 4868, either electronically or by mailing the paper form so that it's postmarked by Tax Day, April 15. This will get you six more months, until Oct. 15, to get your return to the IRS.

Remember, though, that you still need to pay your tax bill or as much as you can when you file your extension.

2. Don't make common mistakes. When you do finish your return, review it for mistakes. They’re easy to make, and every year the IRS says it sees a lot of the same ones, with bad math being one of the most common.

Tax software, used by most taxpayers (and, for those who hire them, tax professionals) can help with the addition and subtraction. But if you enter a wrong amount, either by using bad information or simply transposing figures, it could cause you tax trouble down the road. It also could cost you, by reducing any refund you’re due or adding to your tax bill or, in cases where the IRS can compare the entries thanks to third-party reports such as 1099 forms creating follow-up questions about your return.

So double check your 1040 before hitting send on your keyboard or heading to the Post Office to ensure you don't make any of these 10 common tax filing mistakes.

3. Don't overlook tax breaks. You also don’t want to cheat yourself by missing out on tax breaks. That also happens every filing season, with lots of filers overlooking tax credits and/or deductions. So your final Form 1040 review should include an examination of these 10 too-often overlooked tax breaks, as well as a check of above-the-line deduction, the two dozen tax breaks that don’t require itemizing.

4. Reduce your tax bill with last-minute 2024 IRA or HSA contributions. In most tax cases, you must make moves by the end of the tax year for them to apply to your tax filing the following year. But a couple tax moves, contributing to an IRA or health savings account (HSA), can be made as late as Tax Day and could, in some cases, help cut your tax bill.

The IRA contribution, to either a traditional or Roth account, can count as being made in 2024 as long as you make it by April 15. For the 2024 tax year, you can add up to $7,000 to your traditional or Roth IRA. Taxpayers age 50 and older can contribute up to $8,000. And if you put money in a traditional IRA, you might be able to claim the amount as one of those above-the-line deductions mentions in tip #3.

Similarly, an HSA contribution for 2024 can be made by Tax Day. This special medial account helps owners who have a high deductible health plan cover that policy’s higher deductible with tax-free money. For 2024, you can contribute up to $4,150 to an HSA if you had self-only coverage. Those who had family coverage last year, the HSA contribution limit is $8,300. If you’re 55 or older, you can contribute an additional $1,000. When you make HSA contributions directly, you can claim as an above-the-line deduction on your return.

5. Pay what you owe, now or over time. Okay, your return is correct, with all the tax deductions and credits for which you qualified claimed. But you still owe Uncle Sam. Even if you can’t pay or decide to get an extension, you still need to pay that amount of due tax, or as much as you can, by April 15. Late-payment penalties and interest charges start accruing on any tax amount owed after that date.

Paying at least a portion will lower the penalties. Making an electronic payment is the fastest way to cover all or part of your tax bill. But if you owe Uncle Sam an amount that you just can’t cover in one payment, look into paying it over time. The IRS offers various installment options.

6. File your state taxes. Residents of 41 states and the District of Columbia also face taxes on the income they earned. And most of those state returns also are due on April 15.

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, with an April 30 deadline;
• Iowa, which also wants returns by 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, New Hampshire, South Dakota, Tennessee, or Wyoming. Washington state doesn’t tax wages, but it does collect a capital gains tax from its wealthier residents.

And if you’re thinking I missed Mississippi, the Magnolia State’s personal income tax is still on the books. A new law will eventually do away with that levy, but not until the next decade.

I hope these last-minute filing tips help. If you want or need more, you can find additional tax advice in the ol' tax blog's monthly collections of tax tips: January, February, March, and April.

Okay, I’ve kept you from finalizing your tax return for long enough. As we all know, the filing deadline clock is ticking away.

So get back to that Form 1040, or Form 4868, and meet the April 15 deadline.

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