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Read These 4 Last-Minute Tax Tips before You File

Read These 4 Last-Minute Tax Tips Before You File - TaxACT Blog

Whether you’re just getting started on your tax return or if it’s almost complete, it pays to take a few minutes to read these last-minute tax tips:

Review all Social Security numbers on your return

Despite the complexities of the tax code, the IRS says one of the most common mistakes on tax returns is very simple.

Taxpayers enter incorrect Social Security numbers, or they enter Social Security numbers that do not match names associated with those numbers.

Double-check your Social Security number on your return, and that of your spouse if you file jointly.

Don’t forget to enter correct numbers for each child – they must be correct to take a dependency exemption or qualify for other tax breaks.

The only exception to the Social Security number requirement is if the child was born and died in the same year.

Make sure each child’s name is spelled exactly as on his or her Social Security card.

Avoid penalties under the Patient Protection and Affordable Care Act health insurance mandate

Starting in 2014, you may pay a penalty if you don’t carry a minimum level of health insurance for yourself, your spouse, and your dependents.

These penalties can hurt. If you don’t have coverage for all of 2014 or qualify for an exemption, you could pay up to 1% of your yearly income or $95 per adult and $47.50 per child, whichever is higher.

You probably don’t need to pay the penalties this year, however.

Chances are good that you qualify for one or another of the exemptions.

For example, if you are enrolled in a government program such as Medicaid, your income is too low for you to be required to file a return, if the cheapest coverage you could find would cost more than 8% of your household income, if you’re in jail or not legally in the U.S., or if you claim one of several hardships, you shouldn’t pay the penalty.

There’s also broad exception — you don’t have to pay the penalty if your plan was cancelled and you believe the Marketplace plans are unaffordable, of if you experience any other hardship in obtaining health insurance.

To claim an exemption, you need Form 8965.

For some exemptions, such as the religious objection exemption, you must apply for the exemption through a federal or state exchange.

For other exemptions, such as having coverage only nine or 10 months of the year, you can prepare Form 8965 yourself.

Consider contributing to a retirement fund

It’s not too late to make a contribution to many types of retirement funds. The deadlines for making a contribution vary.

For example, you can contribute to a traditional or Roth IRA up to the due date of your return, not including extensions. That’s April 15, 2015 for the 2014 tax year.

For SEP IRAs and SIMPLE IRAs, you can contribute to a plan up to the return due date for the year, including extensions.

Review, review, review

There’s no substitute for carefully reviewing your tax return before filing.

First, review all TaxACT Alerts to help find errors and missing information.

  • Red alerts identify incomplete or inconsistent information.
  • Yellow alerts identify potential problems.
  • Green alerts point out potential tax savings.

Be sure to actually print and read your finished tax return, too. As a general rule, it’s a good idea to understand your tax return before you file.

If you didn’t get a deduction or credit that you expected, go through that section of the step-by-step interview again and make sure you answered all the questions correctly.

Check your income, and make sure you haven’t entered the same income more than one place (it happens!).

TaxAct makes preparing and filing your taxes quick, easy and affordable so you get your maximum refund. It’s the best deal in tax. Start free now or sign into your TaxAct Account.
About Sally Herigstad

Sally Herigstad is a certified public accountant and personal finance columnist and author of Help! I Can't Pay My Bills, Surviving a Financial Crisis (St. Martin's Griffin). She writes regularly at CreditCards.com, Bankrate.com, Interest.com, RedPlum, and MSN Money. She is an experienced speaker and a member of Toastmasters International. Follow Sally on Twitter.

Comments

  1. Thank you Tax Act & Sally for such comprehensive thorough tax related financial info! It’s presented in such an easy-to-read, comprehensive form. I actually am regretting not studying it more & earlier. Please “keep it up” . I plan on obtaining the same goal.

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