Oops! You did it again — waited until the last minute to get your taxes done. According to the IRS, last year up to 25 percent of Americans waited until the last two weeks before April 15 to file their taxes. If you are one of those people, fear not. Tax experts from TurboTax and TaxACT are here to offer some tips for last-minute filers:
Organize your documents. Before sitting down to prepare your taxes, organize your tax forms by category, says Lisa Greene-Lewis, CPA and blog editor with TurboTax. Put anything related to income (W-2, Form 1099) together and next receipts for expenses such as mortgage interest (Form 1098), property taxes, DMV documents, charitable contribution receipts, and business expenses. If you purchased health insurance in the Health Insurance Marketplace, be sure you have your Form 1095-A.
Decide how you will file. Procrastinators may do best using DIY software online. E-filing with direct deposit is faster, easier and more secure than filing a paper return, experts say, and you'll receive confirmation that the IRS has received your return. Services like TurboTax offer expert help from a CPA or enrolled agent, if you need it, and it is free with most online and mobile offers. And speaking of mobile, you can use mobile apps from tax prep services to work on returns or file from any mobile device.
File an extension, but pay if you owe. "If you are running behind, go in and file an extension before the deadline," says Mark Jaeger, tax team lead for TaxACT. You may be able to e-file for a federal or state extension for free if your state supports e-filing. But remember, an extension only gives you an extra six months to file your taxes, not to pay what you owe. If you owe money, you need to send the IRS at least 90 percent of your tax liability to avoid a tax penalty, Greene-Lewis says. If you can't pay, you may be eligible for an installment payment plan for up to six years.
Maximize your deductions. Taxpayers often forget about deductions like student loan interest, moving expenses and summer day camp. Even the cost of moving a pet may save you money on taxes, Greene-Lewis says. Remember to include non-cash charitable contributions made throughout the year (i.e., donated clothing, household goods and mileage to and from volunteer work). Double-check for tax credits you may be eligible for as well, including the child care credit and Earned Income Tax Credit. Credits reduce your tax bill dollar for dollar and make sure you keep more of your money, she says. Finally, even if you're short on time, consider itemizing versus taking a standard deduction. The IRS reports that most taxpayers — about 75 percent — take the standard deduction, but including a few additional receipts may lower your tax liability.
Contribute to your IRA. You can also lower your 2014 tax bill by contributing to an IRA before April 15, Jaeger says. This year, you can contribute up to $5,500 (or up to $6,500 if you are over age 50).
Comply with ACA. Filers who purchased a health care plan through a marketplace under the Affordable Care Act may need help reporting. If you did not have health insurance, you may be subject to a penalty. For 2014, the penalty is $95 per adult and $47.50 per child or 1 percent of household income, whichever is greater, Jaeger says. If you don't have health insurance, the IRS is offering an enrollment period that ends April 30. The offer has some limitations, but if you qualify and you get enrolled before the deadline, you would not have to pay the penalty for the full year.
Get help if you need it. Even though you've waited until the last minute, if you just want someone else to do your taxes, you can avoid the hassle of getting an appointment with a tax pro by considering services like TurboTax's Personal Pro. A credentialed tax professional will prepare your taxes for you, and you can do it all online without leaving home. You select a CPA (certified public accountant) or EA (enrolled agent) with whom to share your documents, and they will provide you with completed returns so you can claim your refund.
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