July 15 is only days away. Before you hit submit on your return, be mindful of these five last-minute tax tips.
1. Double check your information
We know you’re in a hurry to hit submit. But just pause for second. Sit down and actually read your return before you hit e-file.
Take notes of anything that doesn’t look right. For instance, ask yourself:
- Are any deductions you claimed last year missing from your return this year?
- Are all of your dependents listed? Take a second look at their social security numbers. Typos never helped anyone.
- Do you owe more tax this year, but you aren’t sure why? Use TaxAct’s Prior-Year Comparison report to help yourself pinpoint the difference – and possibly fix the problem.
2. Include required documentation
While TaxAct can help ensure all of the required tax forms are included in your return, the product can only do so based on the information you enter. Take another look at your tax documents. Take another look at your kitchen counter or your office desk drawer. Do you have everything that was sent to you by your employer, bank or other payer?
Before you submit your return, it’s important to make sure all of your tax and financial documents are accounted for to ensure you accurately report all of your information to the IRS. There are a few days left before the deadline, it doesn’t hurt to do a last sweep of your home for any pesky tax documents hiding away.
3. Found one more receipt? It’s not too late!
While you’re busy looking for any missing tax documents, don’t forget to sift through your receipt piles and re-read your credit card statements.
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 24% tax bracket, every $4 in additional deductions generally saves you at least a buck.
4. Don’t hesitate to file an extension
Even though the tax filing deadline was extended by three months this year, there’s a chance you still may not be ready to file. And that’s okay. You can get even more time to complete your return by filing an extension.
But don’t forget to actually file for the extension. You must complete Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, to qualify. 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.
5. Take advantage of the IRS payment plans
We know this year has been particularly hard. If you have a tax bill, but you don’t have the money to pay it, check out the IRS’ payment plans. The agency provides a variety of methods for you to pay your bill and accrue as few penalties as possible.
Visit the IRS’ Online Payment Agreement Application to learn more about the options available to you. If you’re experiencing hardships related to COVID-19, the IRS is providing compliance relief. That includes issues ranging from postponing certain payments related to Installment Agreements and Offers in Compromise to collection and limiting certain enforcement actions. Check out the People First Initiative for more information.