With April 15th quickly approaching, be sure to start preparing your documents to avoid rushing last minute and making mistakes or missing some major deductions that you could have taken. There are several tips that you can follow if you have yet to file, but plan on doing so in the very near future.
Don’t Miss the Deadline
The last thing you want to do is wait so long that you have no chance of beating the deadline. Unfortunately, this is more common than it should be. If you don’t file a return on time you are going to face interest on your unpaid taxes, as well as a failure to file penalty. Both of these are added to your balance due. It is best to file an extension with the IRS if you feel that you cannot file on time.
If you file by the deadline or request an extension, but don’t pay all or some of what you owe, you will incur interest on the amount owed and a failure to file penalty. Even if you cannot pay the full amount, do what you can to send as much as possible by the deadline. This way your interest and penalties are kept to a minimum.
Take Advantage of Recovery Tax Breaks
Thanks to last year’s American Recovery and Reinvestment Act, there are many new tax breaks that can be taken advantage of. Some of them include: Making Work Pay Credit; Homebuyer Credit; Home Energy Credit; American Opportunity Credit; and New Car Tax and Fee Deduction Credit.
E-file
If you want to speed up the filing process and eliminate mistakes, you should consider the benefits of filing electronically. Although this is not your only option more than 80 percent of taxpayers decide to e-file. The two main benefits of this include:
- Accuracy. Most tax programs that allow you to file electronically have the ability to check for missing information and mistakes.
- File with speed. With most software you can file a state and federal return at the same time. Once accepted, the IRS acknowledges this so that you know everything is complete. This is much quicker than filing with the paper method and hoping your return does not get lost. Additionally, when you e-file you can expect to receive your refund (if you are due one) quicker.
Direct Deposit for Refunds
No matter how you decide to file, you can have your refund deposited directly into your bank account. This is faster than a paper check, and you also don’t have to worry about it getting lost.
Along with this, refunds can be direct deposited into as many as three accounts. This is a great way to split refunds between two partners, if a joint return was filed, or just two accounts so you don’t have to do it yourself.
Double Check your work
It is important to double check your return before you send it to the IRS. While most tax programs have a built in system for finding mistakes, they are not going to catch all of them. Some things to check: your math; social security number; signature; make sure all forms are attached.
Installment Agreement
If you do not have the money to pay your entire balance, an installment agreement can help. If you owe $25k or less, you can apply using the Online Payment Agreement application on the IRS website. Or, you can attach Form 9465 – Installment Agreement Request to your return.
For anybody who has yet to file, these last minute tax tips should be helpful.
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