As April 17th approaches, some taxpayers may still be scrambling to get their paperwork in order. Rushing to complete your taxes can lead to errors on your return or cause you to overlook valuable credits and deductions which can mean less money in your pocket. If you’ve waited until the last minute to begin preparing your return, these simple tips can help you to avoid potential mistakes and maximize your refund.
If you’re still filing your taxes using a paper return, now is the time to switch to electronic filing. According to the IRS, approximately 112 million taxpayers filed their returns electronically last year. E-filing can help to reduce the potential for errors in your return and it also helps you get your money back faster if you’re owed a refund. If you owe money, you can still e-file and pay what your tax bill electronically using a debit or credit card.
Once you’ve completed your return, it’s important to take the time to double-check for any possible errors since these can carry over to your state return. Some of the most common mistakes reported by the IRS include incorrect Social Security Numbers, failure to sign a paper return and mathematical errors. If you’re paper filing, it’s especially important to go over your calculations and refer to the tax tables to ensure that your refund or tax owed is correct. If you file a paper return, make sure you’re sending your paperwork to the correct address, since the IRS uses different addresses for refunds and payments.
It’s easy to overlook tax credits and deductions if you’re trying to get your return done with a deadline looming. Before you get started or after you complete your return, it’s important to go through and check for any possible tax benefits you may have missed. According to the IRS, some of the most overlooked deductions and credits include those related to education expenses, retirement plan contributions, charitable contributions, moving expenses, child and dependent care expenses, green home improvement projects and refinancing points.
If you still need time to get your paperwork together, you can file a tax extension using IRS Form 4868, the Application for Automatic Extension of Time to File U.S. Individual income Tax Return. An extension allows you an additional six months to get your return completed. If you owe taxes, the IRS generally recommends that taxpayers file their return on time anyway. Once you’ve filed, you can contact the agency about a payment plan for any taxes that are due. An installment plan allows you to pay off outstanding taxes over a specified period of time and reduces the amount of penalties and interest you owe.
While waiting until the last minute to file isn’t ideal, it doesn’t have to be a source of anxiety. If you find yourself in the position of having just a few days left to file your taxes, following these guidelines can help you to complete your return accurately without causing unnecessary stress.
This post was published on April 12, 2012