Like most people, I haven’t filed my taxes yet. I’m busy. I haven’t even started getting organized. If you’re like me, whatever your reason for not filing yet. It’s really not a big deal. We have until April 15 after all. But, waiting until the last minute to file our taxes means we might be rushed. And that means there’s a higher likelihood of making mistakes or overlooking something important.
To help avoid making a mess of an already unpleasant task, the Credit.com team put together a list of things to keep in mind as you get ready to face the tax task you’ve been putting off for weeks.
1. The Deadline to File
Tax day 2019 is April 15.
2. That’s a Hard Deadline
Your paper return must be postmarked by April 15. And an e-file must be submitted before midnight on April 15. If you miss the deadline, the IRS could slap you with fees. You can file your taxes in 2019 as early as January 28—that’s when the IRS begins processing 2018 income tax returns.
There are two exceptions to April 15. Residents of Maine and Massachusetts have until April 17 to file their 2018 taxes because of official state holidays that fall on Monday, April 15 in those states.
3. You Can Get an Extension
You can get an extension on the April 15 deadline if you file Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. Form 4868 gives you an additional six months to file.
4. An Extension Is for Paperwork, Not Payment
An extension doesn’t apply to paying your taxes. It applies only to filing them. You still have to pay any taxes you owe on or by April 15. If you don’t, added interest and other penalties may added. If you think you’ll owe taxes, make your best guess as to the amount using your previous years’ information and an online estimate calculator, and pay the IRS on time.
5. Stop Saying, “I Haven’t Filed My Taxes Yet”—File Sooner if Possible
The sooner you file, the sooner you get a refund if one is coming. The IRS issues 9 out of 10 refunds in less than 21 days.1 If you want, you could get your refund even sooner with a tax refund advance loan.
6. Waiting to File Puts You at Risk
Taxpayer identity theft is no joke. It generally involves someone using your Social Security number to file a fraudulent return and get a refund in your name, which prevents you from getting your refund in a timely manner—it can take up to six months to resolve tax-payer identity theft. The sooner you file, the less likely a thief will beat you to the punch.
7. If You’re a Tax Fraud Victim, You May Have to Prepare a Paper Return Next Year
If you’re a victim of tax fraud, you may get a PIN from the IRS that you have to use to file a paper return next year—no e-filing for you. That PIN ensures a thief doesn’t try and file for you again, but it is a bit of a pain.
8. Unpaid Taxes Carry Fees
Interest on unpaid taxes compounds daily from April 16 to the date you pay in full. The fee for failure-to-pay is .5% of your unpaid balance each month your payment goes unmet and can reach up to 25% until the debt is paid in full.
9. Unpaid Taxes Can Affect Your Credit Score
If your unpaid-tax problem gets bad enough, the government may make a claim on your property until the debt is repaid. This is called a tax lien, and it will show up on your credit report. You can see how a tax lien and other factors affect your credit by reviewing your free credit scores on Credit.com, which is updated every 14 days.
10. Make Sure You Have All Your Forms
If you have multiple jobs in one year, make sure you have all your W2s or 1099s. If file without including all your W2s or 1099s, you still get your refund, but if you owe any additional tax, you’ll have to complete an amended return and still pay your full tax balance by April 15 deadline. And that’s if you’re lucky enough to realize your error before April 15. If you don’t, you risk facing more fees and penalties for failure-to-pay.
11. Report All Your Income, Even If You Didn’t Get a Form
If an employer doesn’t provide your W2 by January 31, you are still responsible for paying taxes on all earned income. Ask an employer for a copy of a missing W-2 or ask the IRS for transcripts of forms you think you didn’t get. Of course, this takes time, so you may need to file an extension.
12. *ahem* ALL of Your Income
The easiest way to get noticed by the IRS is not reporting all of your income. And not just W2 income, jury duty and prize money—lottery, etc.—is also taxable. Other income commonly forgotten about on income tax returns includes reinvested dividends, out-of-pocket charitable contributions made to you and student loans.
13. If You Wait to File, Plan to Wait in Line and for Your Refund
Plan to wait at the post office, at your local tax preparer’s office or anywhere that has anything to do with taxes if you don’t file earlier. Not waiting until the last minute is a good way to avoid the crowds. Filing later also means you’ll get your refund later unless you take advantage of a tax refund advance loan.
14. Take Advantage of Technology
There are ways you can complete and file your taxes without having to do them the old-fashioned way—by hand. Tax software can be a huge help when you’re facing a time crunch. And filing your tax return online—called e-filing—is also easy and secure, and it means you can receive your tax refund that much faster. The IRS lets you prepare and file your taxes online if you have an income of $66,000 or less using its Free File service. If your income is more than $66,000, you can get free fillable forms from the IRS that will do the math for you.
15. Inability to Pay Is No Excuse
Too many people put off filing their returns because they can’t pay what they owe. That approach won’t help. It will simply result in your having added interest and fees on top of what you can’t pay today.
16. Make an Effort to Pay
If you feel you can’t or won’t be able to pay, attempt to pay as much as of the balance as you can. Then, contact the IRS to go over payment options that are available to you. If you simply can’t pay, consider paying your taxes with a credit card.
17. Get a Payment Plan
If you can’t pay, you can ask the IRS for a payment agreement. You do still need to file by April 15 though—sooner so you can get your agreement in place. Many agreements exist if you can’t pay your tax bill on time. Full payment agreements of up to 120 days are available if you qualify for the additional time and there’s no fee to take advantage of this option. You still incur interest on your tax bill, however. Another option is installment agreements that let you make monthly payments over a specified period of time. There are also payroll deductions and an Offer in Compromise you can consider. An offer in compromise let you satisfy your tax debt for less than the full amount you owe.
18. Chances of an Audit Are Low
Of all the individual income tax returns filed in 2016, the IRS only audited 0.6%.2 Read more about how to avoid an audit. A few red flags that can increase your chance of an audit include higher income, no income, unreported income and deductions that are suspicious or don’t make sense. Be careful when it comes to itemized deductions, rental property expenses and your filing status.
19. You Still Need to Be Careful
Just because it’s unlikely that you’ll get audited, you should still prepare your taxes as if you will. Not only could you get in trouble for a sloppy return, but you could also miss out on savings with deductions or credits you don’t look into.
20. Watch Out for Scammers
Whenever people need help, there are people out there waiting to take advantage of them. If you’re asking someone to prepare your taxes, make sure they’re qualified to do the job and that they have a good reputation. See this guide for help determining whether or not you need a pro to do your taxes. And learn how to protect yourself from taxpayer ID theft.
21. Ask for Help
If you can’t afford or don’t want to pay for a professional, that doesn’t mean you’re on your own. You can turn to trusted friends or family with your last-minute questions on anything that might be confusing. With a little elbow grease, technology and friendly advice, you can get your maximum refund back—fairly painlessly.
22. You’re Responsible for What You File
Ultimately, you—and you alone–are responsible for what’s in your tax return, even if you used software or a professional preparer to complete your return. Don’t zone out just because someone else is doing the heavy lifting. Go through your income tax return to ensure its accuracy. You should also make sure that all the required signatures are included, including the signature of your tax preparer.
23. Do You Spell That With a C or a K?
Of course, you know how to spell your name, but don’t leave anything to chance. This is especially important if you changed your name recently. Your tax return must have your legal name on it. Even a small mistake can cost you time and money.
24. While You’re at It, Check Your Address
This is an easy one to mess up, especially if you’ve moved. Be sure to file with your current address.
25. Check Your Social Security Number
It’s easy for many of us to transpose numbers—especially when we’re staring at a sea of numbers on a tax return. The IRS will reject your tax return if the Social Security number is wrong.
26. Double Check Your Bank Account Info
You want that refund ASAP, right? Double check your bank account info if you’re asking to have your refund automatically deposited. Incorrect accounts do happen. And an incorrect account means your return won’t end up in your account. If you notice you’ve given the wrong information, you’ll have to notify the IRS and wait up to an additional six weeks for a check to arrive in the mail. The same goes for making a payment—you want that go to through too.
27. Check Your Dependents’ Social Security Numbers
You need to have the right Social Security numbers for your dependents in order to get associated credits. The IRS uses your dependents’ Social Security number to make sure you have the right to claim the dependent, and that no one else is claiming them for the tax year.
28. Make Sure You Can Legally Claim Dependents
To ensure you can legally claim a dependent, there are relationship tests, gross income tests, residency tests and more. Make sure the person you’re claiming as your dependent passes all of the needed tests. And if your child is in school and working, remind him or her not to claim his own exemption.
29. There Are Lots of Deductions You Could Potentially Take
Find out all the deductions you can take—this list of common deductions is a great place to start. Deductions are subtracted from the amount of your adjusted gross income which then makes your taxable income lower. This lowers your tax bill and increases your refund if any.
30. Deductions Include Stuff You Bought for Work
Go back through your bank and credit card statements and scan for expenses you haven’t been reimbursed for. These can be deducted on your Schedule A under Unreimbursed Employee Expenses.
31. Student Loan Interest Can Be Deducted
To deduct your student loan interest, get the forms you need from your student loan servicer. They’re usually available in your online account. Qualified student loans include those that are in your name and those that you paid interest on throughout the year.
32. Deduct Medical Expenses
You can deduct out-of-pocket medical expenses if you itemize file—that includes deductibles and co-pays. You can’t though deduct any expenses that are reimbursed by insurance. If your medical premiums are deducted pre-tax at work, you can’t deduct them on your tax return either. No double-dipping! Be sure to keep all of your receipts.
Starting January of 2019, you can only deduct the amount of your total unreimbursed medical expenses that exceed the 10% of your adjusted gross income. And if you’ve already been reimbursed for certain medical expenses, you can’t deduct them on your tax return.
33. Job Search Expenses
You can deduct expenses associated with a job hunt, provided you’re looking for a new job in your current field.
34. Don’t Go Crazy
Some people try to take penny-pinching too far.
35. Itemize Charitable Contributions
So many people forget to do this, but it’s important. You can count charitable gifts made until April 15 of the year. That includes money donations made to charitable organizations, churches and religious organizations, nonprofits, veterans’ groups, public parks and more.
36. Do Some Spring Cleaning
If you didn’t get around to much charitable giving last year or you didn’t keep records—you can always donate items to a tax-exempt thrift store or any of the places, including those listed in item 35. Just be sure to get a receipt.
37. Don’t Skip the City Tax
Local and other state taxes, which you can check for at the bottom of your W-2 forms, refer to a wage or income tax. They may not be automatically deducted from your paycheck if you’re self-employed. If you haven’t paid them, be prepared to cut a check. Here’s a handy guide to understanding your paycheck.
38. Contribute to an IRA
Want a last-minute way to reduce your tax bill? Unlike most other tax-saving strategies, which have to be in place by December 31, you can contribute to an IRA up until tax filing day if you haven’t already contributed your maximum for the year. For example, you can contribute $5,500, the maximum amount for 2018 and under 50, and save as much as $1,925 in taxes if you’re in the 35% tax bracket.
39. Don’t Overlook Credits, Either
The IRS estimates that four out of five taxpayers are eligible for the earned income tax credit, but don’t take it. A tax pro or tax software can help you determine if you qualify.
40. Keep in Mind Things Change Year to Year
Just because you got deductions or didn’t qualify for credits last year, doesn’t mean the same is true this tax year. Take time to find out what changed.
41. You May Not Have to File a Tax Return
If you make less than a certain income threshold, which varies, based on a variety of factors, you’re not required to file a tax return.
42. It’s a Good Idea to Double Check
Even if you made less than the income threshold that applies to you, don’t ignore the tax season completely. If you had federal taxes taken out of your paycheck or qualify for the earned income tax credit, you may have a refund coming. To get your refund, you need to file a return.
43. You Can Get a Refund from a Previous Year if You Forgot to Claim It
You have three years to claim a refund. So if you had one coming in one of the last three years and didn’t get it, find out your options.
44. Think About the Best Way to Use Your Refund
Need some motivation to get your taxes done? The average refund in 2017 was $2,782. If you have one coming, stash it in a savings account, buy that thing you’ve wanted to splurge on, pay down debt or even use the cash influx to help build your credit.
45. Consider Adjusting Your Withholding
Getting a big refund isn’t necessarily a good thing. You may not want a big check back from the government every year. If you are getting a big refund, consider adjusting your withholding. That way, you can have more of your money throughout the year—and even earn interest on it—and give less of it to Uncle Sam to earn interest on instead of you.
46. Hold On to Your Paperwork
IRS audits generally go back three years, but the can potentially reach back six years. Keep a copy of your returns for at least six years in a safe place. You may also want to hold on to W-2s if you’re planning on applying for a mortgage any time soon.
47. Make Amends
If you made a mistake in your rush to file, you can amend your tax return. You won’t need to do this for math errors—the IRS will fix those—but you have to file a Form 1040X if your filing status, number of dependents or total income is wrong or if you forgot to claim an exemption or deduction. If you don’t and you need to, you face more in fees and penalties for failure-to-pay.
48. Make a To-Do List
Write down everything that gave you trouble this year or deductions you weren’t sure you could get because you didn’t document them, so you won’t make the same mistake next year. If you haven’t kept a list of charitable contributions, go back through your online receipts or bank statements and list them out before you prepare your return or have it prepared for you.
49. Use a File Folder—On Your Desk to Desktop
A file—whether a physical folder or a virtual one or both—can help you store receipts and records to use when preparing your return.
50. Set a Calendar Reminder
So, you’ll remember to start your return and check to ensure you’ve received all your forms on time.
If you’re unclear about the tax filing process or are unsure about which deductions and tax breaks you qualify for, it’s a good idea to get assistance from a professional tax preparer. They can run through your tax documents and show you areas of interest you may have missed trying to do it yourself.
They can also help you get an interest-free refund advance if you need funds fast and can’t wait.
This article was originally published March 29, 2017, and has been updated by another author.
1 https://www.irs.gov/newsroom/irs-issues-nine-out-of-10-refunds-in-less-than-21-days
