Last-minute tax filing tips
Submitting your taxes is, without a doubt, one of the most important financial events of the year. Unfortunately, daily life can often cause us to forget this big task, as it doesn’t happen so often. So, if you’ve been waiting until the last minute to file your tax return, you’ll need to hurry! The good news is, that you’re not alone in this situation. A lot of people tend to forget the deadlines and start their tax process too late. Some people simply forget while others delay on purpose to avoid the process if they know they’ll owe money. And even though it seems intimidating, the process is easy with the help of the best tax relief firms and last-minute tax filing tips from us. If you thoroughly prepare, there’s no reason to avoid filing your taxes, even if you’re running late.
People dislike dealing with taxes for the most part, and sometimes they think they’ll go away if they ignore them long enough. But the truth is, they won’t. Tax filing, as well as the deadlines for it, simply can’t be ignored. If you don’t file a return, you can face quite a few civil, and even criminal penalties. This is a very bad thing for you in the long run, but it can be avoided with a bit of preparation. So, if the deadline is approaching, and you still didn’t start the process, Consumer Opinion Guide is here to assist you. We’ll explain in detail the steps needed in order to take care of everything on time, as well as your options if you break the deadline.
Knowing the deadlines is the first step to success
In order to get everything sorted on time, you need to know when the deadlines for tax filing are. The deadline for filing your personal income tax return for the previous year is April 15th. The only exception to this is when that day falls on a Friday. In this case, you have until the following Monday to get your papers in order. This year, April 15th falls on a Friday, which makes the 18th the last day by default. In 2023, it will be the 18th again, since the 15th will be a Saturday. Remember that you can still file your taxes, even if you missed the deadline. You can ask for an extension with a special document, but we’ll touch upon that subject a bit later.
One of the best last-minute tax filing tips is to get your paperwork ready
If you have ever done taxes, or know someone who has done them in the past, you know one thing is certain. Filing tax returns includes a lot of paperwork. And we really do mean a lot of paperwork. This is natural, seeing as it’s your money in question. There is also the fact that there are different types of taxes in the US, each with its own set of documents. So, before you can start doing your return, you need to gather all of the necessary papers. In the first few months of the year, you’ll work with a few tax-related documents, all of which are necessary for proper filing. These are:
- W-2 form provided by your employer
- Form 1099, which stems from other income sources, such as freelance work, contracts, and dividends
- If you’re a homeowner with at least $600 of mortgage interest paid off, you’ll need Form 1098
- Students who paid off at least $600 of their federal student loans will receive Form 1098-E
- Form 1095 which shows healthcare insurance coverage
- Letter 6419 issued by the IRS, documenting advance child tax credit payments
- Records of child care and dependent care
- Various receipts for charitable contributions
Although there are more, these are the most common documents you’ll work with. And because there are so many of them, you’ll need to be aware of each one, and remain properly organized.
Figure out which healthcare coverage form applies to you
As we’ve mentioned in the previous paragraph, if you have health insurance coverage, you’ll have to work with Form 1095. However, there are three different versions of this form. Because of the importance of mental and physical health, you really need to pay attention to this. In case you’re getting your insurance through the Health Insurance Marketplace, Form 1095-A will be sent to you. This form is only needed for the information contained in it, meaning you don’t have to include it with your return. If you’re buying your coverage straight from an insurer, you’ll get Form 1095-B, and if your employee is covering your insurance, you’ll receive 1095-C. Filing these are taken care of by the insurer and employer respectively, meaning you don’t need to wait for these to arrive in order to file your return.
Simplify last-minute tax filing by doing it electronically
If you’re running out of tile to file your tax returns, you certainly don’t want to spend hours bent over pieces of paper and a calculator. And thanks to modern technology, you don’t have to, either! Filing your returns electronically, otherwise known as e-filing, is the fastest, simplest, and most reliable approach. If your adjusted gross income is $73.000 or less, you can file taxes online, free of charge, with IRS Free File. If your income is higher, you can still rely on Free File’s fillable forms for reference, but you’ll still have to file them on your own. Using certified digital tools also helps you avoid common IRS tax scams. You can also choose to hire tax preparers who are authorized to e-file. Do keep in mind, however, that doing this last-minute is risky, as they might not be able to fit you in their schedule.
What makes this system so convenient, is the fact that you can import most of your data into the tax filing programs. This saves plenty of time and reduces errors when filing, and is a great addition to last-minute tax filing tips. If your employer or financial institution permits it, you can enter basic personal information, and the program will automatically retrieve your W-2 and 1099 forms. There are other options available, depending on the program you use. For example, you can upload a picture of your W-2 form, allowing the program to scan the data from it. Or, you can upload your last year’s return in PDF, and let the program use it as a reference for this year’s submission.
Making an IRA contribution can help you in the long run
Contributing to your Individual Retirement Account, or IRA can be done right up until the filing deadline. This not only helps you prepare for the future but is also a form of tax relief. When you make an IRA contribution, you can deduct that amount from your income. This means that you’ll pay tax on a much smaller amount. For this tax year, you can contribute up to $6000 to the retirement account, as well as an added $1000 “catch up” sum if you’re above 50 years old. Keep in mind that this contribution is deductible if you meet certain requirements, such as not having a retirement plan at work. IRA contributions should be done every year, in order to get the most out of the savings. Just make sure to monitor your investments and adjust them as your retirement nears.
One of the vital last-minute tax filing tips is being aware and avoiding errors
Filing your tax returns can be a very tiring process. This is normal, seeing as there are plenty of calculations, numbers, and documents involved. And because you’re doing your filing last-minute, it is very easy to make mistakes in a hurry. Because of this, one of the best last-minute tax filing tips we can give you is to remain vigilant at all times, and if possible, have someone to help you. Always make sure to double-check everything, and just in case, have someone trusted review it for you. You should be especially careful when working with numbers, especially ones relating to your social security. Your e-filing software can alert you if you make math errors, but it won’t detect an incorrectly entered number. Staying focused can also help you avoid falling victim to tax relief scams. So, make sure to take plenty of breaks, and avoid long sitting sessions.
Prepare in case you can’t complete your tax return on time
Filing your tax last-minute means that you’ll really have to step up your numbers game. However, even with the best intent in mind, sometimes we don’t succeed in meeting our deadlines. So it’s entirely possible to miss the pre-determined deadline for federal return, no matter how hard you try. But, the good thing is, you don’t have to worry! You can ask for an automatic extension from the Internal Revenue Service by using Form 4868.
With this form, you can extend your tax filing deadline by another 6 months, giving you ample time to sort out your finances in detail. The convenient thing is that you can also rely on e-filing for this extension. Although you can’t use the filing software if your income falls below a certain level, everyone can file Form 4868 digitally!
Make sure to file your taxes even if you’re unable to pay the bill
Your inability to pay shouldn’t prevent you from filing everything on time. In fact, avoiding filing your returns because you can’t pay your taxes only makes matters worse. Not only can you face late filing taxes, but you can also potentially get into legal trouble as well. Even if you can’t pay what you owe, you can mitigate the damage by filing your returns on time. If you fail to file, you will receive a penalty of 5% of the total amount owed every month. This penalty goes all the way up to 25%. However, if you file, you’ll only be charged a 0.5% penalty of what you owe each month until everything is paid off. Lastly, if you can’t pay the full amount, pay as much as you can. Additional interest rates and penalties can be reduced to a minimum as you pay as much as you’re able to.
When tax filing last-minute, prepare yourself for not being able to pay what you owe
Despite all of your preparation, you still might not be able to pay all you owe by the tax deadline. If this is the case, there’s no need to worry, as you can still apply for an IRS installment plan. However, this is something you should do pre-emptively, rather than wait for assessment. Applying on your own instead of waiting for the IRS to contact you about the irregularity gives you credibility. Make sure to clearly convey the message that it was an honest mistake and that you’re willing to rectify the situation. Contrary to popular belief, the IRS agents aren’t out to get you and will work with you. Depending on how much you owe, you can apply for different plans.
For example, if you already filed your return, and owe less than $50.000, you can apply for an IRS Debt Forgiveness Program. Keep in mind that this sum is the total of all your taxes, penalties, and interests. The payment agreement is one of the better last-minute tax filing tips as it helps you avoid calling IRS or visiting their office to apply. And, if you owe between $50.000 and $100.000, you can apply online for a short-term solution. The most convenient thing about the process is the speed. Very shortly after applying for the program, you will be informed by the IRS whether your application was approved or not, allowing you ample time to prepare for your next step.
Save yourself the time of having to go through the ordeal of last-minute tax filing. Explore our list of top rated tax relief advocates and let the skill and experience of Consumer Opinion Guide lead you to a stress-free tax filing system!