So it’s down to the wire and you’ve yet to file your taxes or even look at the stack of tax forms gathering dust on your desk. Take heart: Even those with the most complex tax returns still have time to get it done right. If you’re among the many who put off their annual tax task, read on for some moves to make by the 2016 filing due date: Monday, April 18.
1. Know the Basics
Whether you choose to put it off or do it today, be sure you know the basics of your Form 1040, including your proper filing status, all legitimate dependents, your income (from W-2s, 1099s and payments that didn’t generate tax forms) as well as any capital gains and losses. Be sure to double-check everything.
2. File for an Extension
Need more time to gather your paperwork? Not to worry, you can move your filing deadline up to six months by filing for an extension with Form 4868. Just remember, you’ll still have to pay by April 18 to avoid a late-payment penalty and interest charges on any unpaid tax debt.
Keep in mind, too, that tax liens can hurt your credit. You can see if any tax liens are currently impacting you by viewing your free credit report summary, updated each month, on Credit.com.
3. Use Tax Preparation Software
Last-minute filers may have trouble finding a tax pro who’s available with less than a week’s notice. That’s why tax prep software can be a good alternative for late filers.
The IRS offers free software for filing taxes. There are also some companies that work with the IRS to provide free tax software and offer inexpensive paid online filing for those who don’t qualify for free filing.
4. Seek Free Guidance If Necessary
If you can’t DIY, have a complicated return this year or are new to doing your taxes, there are plenty of resources to turn to at your local library or universities and colleges. If you earn less than $54,000 annually or are 65 or older, you can qualify for free preparation assistance from the IRS.
5. Know Your Payment Options
If you find out you owe money to the IRS, coming up with the funds last-minute can be difficult. So, some last-minute filers turn to credit cards to pay off their tax bill. Just keep in mind using a credit card will almost certainly come with a processing charge. (You can find out more on what those charges will be here.)
6. Don’t Delay Your Payment
If you owe taxes, the last thing you want is to pay interest and penalty charges on top. You won’t be issued a penalty if you’re supposed to receive a refund, but why prolong the anxiety? If a refund is waiting, you should file as soon as possible to get it. Plus, as the IRS explains online, you could forfeit your right to the refund if you don’t file your return in three years.
7. Arrange a Payment Agreement
If you’re short on money, don’t despair, you can set up a payment plan with the IRS. Use the IRS Online Payment Agreement Tool to get started or mail Form 9465, Installment Agreement Request, available online at IRS.gov.
8. Don’t Miss a State Deduction
“Some state tax benefits are different from federal,” David Hryck, a partner at Reed Smith in New York, said in an email. “In some cases, particular states allow for a deduction that the IRS does not allow, which can apply when it comes to 529 plans. Tax-exempt interest for federal purposes may not be tax-exempt in your home state either.”
9. Double-Check Everything
“If you’re in a rush to prepare, make sure you remember to sign your return and double-check your figures, especially Social Security numbers,” Hank Hurst, a certified public accountant and chief executive of the Hurst Company, in Florida, said in an email. “If you’re mailing your return at the last minute, make sure you use a postage meter that says April 18th or you could be considered late.”
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