7 tips for procrastinating taxpayers before the deadline
This story has been updated.
Haven’t filed your taxes yet? You’re definitely not alone.
In fact, millions of Americans are waiting until the very last minute to do their taxes this year. And with returns due April 15, time’s running out.
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We put together some tax hacks and tips to help you get the job done:
Check (and recheck) to make sure you have all the documentation you need.
One of the first steps to filing a tax return is having the appropriate forms. Be sure to have the proper paperwork, whether it’s a W-2 or 1099, if you are determined to file before the deadline. And remember to keep copies of your tax return information and documentation.
File an extension if you know you won’t be able to meet the deadline.
If you're running low on time and are worried about making costly tax mistakes, consider filing for an extension. This will give you up to six more months, but you'll still need to pay any taxes owed by April 15. Find IRS Form 4868, "Application for Automatic Extension of Time to File U.S. Individual Tax Return" on the IRS website and submit it before the filing deadline.
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Take advantage of free tax services.
If you make $66,000 a year or less, you can use the IRS' "Free File" software to file your taxes. Those making $55,000 or less, the elderly, anyone with disabilities or who speaks limited English can also use the Volunteer Income Tax Assistance program, which offers free tax help as well.
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Be mindful of the midnight deadline.
Planning to mail in your tax return? Remember, it must be postmarked by midnight Monday, April 15, but because post offices close at the end of the regular business day, you may actually only have until the end of the business day to get the necessary time stamp. And if you’re filing electronically, you must have a time stamp before the midnight deadline to avoid late penalties.
Opt to file your taxes online.
There are many upsides to filing your taxes electronically, one of which is the aforementioned post office hassle. It’s also useful for those pressed on time and wary of making errors. In fact, the IRS reports that the error rate among returns filed electronically is less than 1 percent. For paper returns, the error rate is considerably higher at 21 percent.
Don’t forget about these commonly overlooked deductions.
According to CNBC, there are several deductions that are commonly missed by taxpayers, such as:
- Student loan interest: You can deduct up to $2,500 of student loan interest paid in a given year, but be aware of income limits to this deduction.
- Moving expenses: If a new job or transfer required your relocation and if the new workplace is at least 50 miles farther away from your old home compared to the distance between your old workplace and old home, you may qualify.
- Property taxes: Do you have multiple properties or timeshares? Consider tax deductions for your additional properties, including RVs or boats.
- Non-cash charitable contributions: Do you donate to Goodwill or Salvation Army? Collect and include your receipts when you file for this deduction. You'll need to use Form 8283 if your deduction for all non-cash gifts is over $500, CNBC reported.
- Contributions to certain tax-advantaged accounts: Have a high deductible health insurance plan? You could have access to a health savings account that could be used for future medical costs or for retirement savings. According to the IRS, for 2019, if you have self-only HDHP coverage, you can contribute up to $3,500. And if you have family HDHP coverage, you can contribute up to $7,000.
- Miscellaneous deductions: If you have costs that exceed 2 percent of your adjusted gross income, such as tax preparation fees, you can claim that amount of expenses.
- Medical deductions: You can deduct qualified medical and dental expenses that exceed 10 percent of your adjusted gross income for the year.
Prepare for next year.
While you’re scrambling to put your expenses in order for Tax Day, keep track of expenditures you may be able to do without. Start prepping for Tax Day 2020 by creating a folder to keep track of your spending and house any receipts that may lend you a refund next year. You can also consider making an appointment with an accountant.
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