Another year, another tax return. As we inch closer to the tax filing deadline, you may be scrambling to complete your return.
While it is best to beat the deadline, it doesn’t pay to be in too big of a rush. If you miss something, you may pay more tax than you need to, or you may get a letter from the Internal Revenue Service (IRS) about a mistake or omission.
Before you finish your return, take one last look to ensure you’re ready to submit.
1. Check for accuracy like a pro.
DIY tax software is good at asking you the right questions to help you prepare your return accurately.
However, that doesn’t mean you don’t need to review your return. Before you e-file, it’s important to read every page of your return, just like a tax accountant would do if he or she prepared it for you.
As you read your return, look for the following:
- All deductions and other tax perks you expected are included: For example, did you deduct mortgage interest if you own a home? If you’re missing a deduction or credit, go through that filing step in the product again to ensure you answered all the questions correctly.
- The big picture adds up: Does your total income look right to you? Are you missing any kids listed as dependents? (It happens!) Are all Social Security Numbers (SSN) correct?
- Carryovers from last year are counted: Look at last year’s return for any federal or state overpayments applied to this year. This includes any net operating loss and other carryforwards.
- Last year’s figures vs this year’s results: Comparing returns is a great way to see if something is “off” or if you’re missing a tax break. If you used TaxAct last year, you can use the year-to-year comparison to see how your tax situation has changed.
2. Use TaxAct Alerts.
TaxAct provides Alerts to find errors, omissions, and possible missed tax breaks before you file your return. Once you finish inputting your information, the software will run Alerts and indicate any areas you should review.
This feature makes it easier to submit your return with confidence that you didn’t miss anything based on the information you included.
3. Review earlier data.
If you started your income tax return weeks ago but waited a while to finish, it’s important to take a second look at the information previously added to the return. This is especially true if you didn’t have accurate numbers at that time.
Before continuing your return from where you left off, take a few minutes to review the information up to that point. It will ensure you have the most recent data included and didn’t forget to correct anything.
4. File by the tax filing deadline, even if you owe tax you can’t pay.
If it looks like you’ll owe more tax than you can pay right now, don’t let that stop you from filing your return by the deadline.
It can be easy to think it’s better to not alert the IRS to the fact that you’re behind on your tax payments. However, it won’t take them long to find out. It’s better to face the music, and file your return now rather than pay penalties for both filing late and paying late.
Plus, knowing how much you owe upfront is better than spending the next several months wondering how bad it might be.
5. File an extension if necessary.
If you need to file an extension, complete your return as best you can before you file, and send payment with your extension.
The problem with putting off preparing your return until the tax filing extension deadline is that you don’t know how much income tax you owe. You could end up with a big tax bill plus penalties and interest if you pay too little toward the bill now. Or, on the flip side, you could pay too much and lose the use of your money for a good portion of the year.
Your taxes also don’t get easier as the months go by. It only gets harder to remember expenses and other details of the prior year. To ensure you take advantage of all the tax perks available to you, it’s best to finish your return and file by the deadline if at all possible.
If you can’t meet the deadline, do as much as you can, stay organized, and keep good notes of your expenses. After you file for an extension, finish your return as soon as you can.