You’re almost ready to file your return. Is there anything you should do before you send it to the IRS?
The following are 5 tax tips to ensure your taxes are in good order:
Make sure your return is correct
The best thing you can do to make sure your tax return is correct is to sit down and actually read it.
Take notes of anything that doesn’t look right – a deduction you didn’t get, for example.
Make sure you have all the exemptions for kids and other dependents that you should, and your return shows all their correct social security numbers.
It’s especially important to carefully review your return if something seems “off,” but you aren’t sure what.
For instance, if you owe a lot more tax this year, and you don’t know why, you can use the Prior-Year Comparison report to pinpoint the difference – and possibly fix the problem!
Include required documentation
You must attach certain documents to your return. The most common document to attach is your Form W-2.
You must also attach any other documents, such as brokerage statements, if they show income tax withheld.
Found one more receipt? It’s not too late!
Go ahead – look in the receipt piles, and read your credit card statements one more time.
Pay special attention to statements from the beginning and the end of the year that may have transactions from two years. You deduct expenses from the year of the transaction, regardless of when you pay your credit card bill.
If you’re in the 25% tax bracket, every $4 in additional deductions generally saves you at least a buck.
Don’t hesitate to file an extension
You want to get your taxes over with. But you’re still looking for that charitable contribution receipt, or you’re trying to get your spouse to review the business phone bills.
If you file before you’re really ready, you may miss deductions, or even have to file an amended return later. There’s an easier way.
You can get an additional four months to complete your return, no questions asked, by filing an extension. You can do it every year if you want (some people do), and the IRS doesn’t care.
Don’t forget to actually file the extension, however. It’s probably the easiest IRS form there is, but if you don’t file it, you can be hit with a failure-to-file penalty.
What if I owe tax?
If you may owe additional tax, but you don’t know how much, filing an extension can be a bad idea.
The IRS levies a separate penalty on late payment of tax. You’ll need to do as much of your return as you can, and send payment with your extension.
Some people find that by the time they determine how much tax to send with their extension, they might as well finish their return. That is one way to get it done and out of the way!
How much time are you willing to spend to find just one more receipt to lower your tax bill or get a bigger refund?