Tax Day (April 15) is right around the corner. Even if you haven’t started preparing your taxes yet, don’t stress out about it. You still have time to get everything together and get your taxes filed correctly and on time.
With tax season ticking away, it’s easy to become overwhelmed. Here are nine last-minute tax tips for families:
Cut your tax bill
There’s still time to reduce your tax burden. If you’re looking for extra ways to save, remember that you can still make contributions to your individual retirement account (IRA) through Tax Day and still get the deduction for the prior year.
Double check those child-related expenses
Many families assume that tax breaks related to children are limited to personal exemptions but there are many more. Depending on your income level, you also may qualify for the child tax credit, the additional child tax credit and the earned income tax credit. Additionally, expenses related to children may also lead to special breaks like the adoption credit, student loan interest deduction and the American opportunity tax credit.
Don’t assume that you can’t take deductions if you don’t itemize
There are a number of so-called “above the line” tax deductions which benefit even those taxpayers who don’t itemize. You can find them listed on the front page of your form 1040 beginning at line 23. They include deductions for expenses related to being a teacher, health savings accounts, moving expenses, tuition and fees expenses and more. Be sure to ask your tax professional if you think you qualify since these deductions lower your taxable income before you calculate your tax due.
E-file your return
The Internal Revenue Service encourages taxpayers to file electronically this year. It’s fast, easy and free (while your preparer may charge a fee, the IRS does not). Best of all? No need to wait in line at the post office.
Use direct deposit
The IRS encourages taxpayers who are anticipating receipt of a refund to use direct deposit. It’s the fastest way to get your refund back from the IRS. Most taxpayers who e-file and use direct deposit receive their refunds in less than 21 days.
Take the time to pull out receipts, forms W-2 and 1099 and other documentation. You want to use the real numbers, not estimates. Disparities in numbers on tax forms (such as differences between what’s reported on your W-2 and what you report on your 1040) will cause the IRS to yank your return — and they might wonder where else you might have made a mistake. Be precise.
Remember that not all tax breaks are equal
While it’s true that many states follow the guidelines set up by federal tax laws, not all of them do. In some instances, there might be additional tax breaks at the state level that you won’t find at the federal level: For example, some states offer tax deductions for contributions to a state-sponsored education savings plan. Don’t leave money on the table. Be sure to ask your tax professional for more details.
Rushing through your return causes errors. Mistakes can delay your refund, resulting in lost deductions or worse, cause your return to get a second glance by the IRS (and nobody wants that). Take a breath and double-check your return.
If you absolutely can’t get your return together on time, you can always ask for an extension. To file for extension, use federal form 4868 (available online at IRS.gov). Extensions of time to file are automatically granted for six months, so you’ll have until October 15 to file your return. Remember, however, that an extension is just an extension of the time to file and not the time to pay so if you’ll owe Uncle Sam at tax time, you’ll want to make a payment before April 15.