As much as we dread April 15th that day comes around every year like clockwork. The moment of truth is less than one week away. Have you procrastinated this year filing your taxes? If so, you are not alone and we are here to give you a guide with 5 quick tips to completing your taxes last minute.
Tip 1 – Organization is Key
Before you sit down to file your taxes, gather all of your personal, income, credit, and deduction information. This includes (but not limited to):
Personal information: Social security numbers, birth dates, addresses for all homes occupied during 2018, and correct spelling for yourself, spouse, children, and any other dependent you plan to claim.
Income documentation: Gather all W-2s and 1099 Forms. This includes a W-2 from your employer(s), 1099 for contract work, interest or dividends, freelance work, state tax refunds, side job etc. Hopefully, if you are a entrepreneur, you’ve kept exceptional records of cashflow. Even if you did not receive a W-2 or 1099, you are still required to report all income which means you should take the time to calculate all income from all sources. If the IRS discovers you left any of these out, you may owe penalties.
Deduction and credit documentation: Grab your receipts for charitable donations (including church tithes), receipts for purchases towards your business, child care, and health care. You will also need your mortgage 1098 Form, 1098-E student loan interest form, 1095 health coverage Forms, etc.
Because the standard deduction nearly doubled in comparison to last year ($24,000 for married couples filing joint), you may not need to itemize or claim any additional deductions this year. There are many tax deductions that were eliminated. NerdWallet has a great article explaining this year’s tax deductions and credits.
Tip 2 – Time Management
Even though you’re on a time crunch, do not rush! Not only will mistakes delay any refund, it could also cost you. Set aside a significant amount of time without distractions to focus on filing efficiently. Double check all information before you hit submit. The last thing you want is to enter the wrong bank account information if you expect a direct deposit refund.
Tip 3 – File Online
If you do not have a tax preparer by now, chances are, you will not find one under this time constraint. Filing online is probably the quickest and most effective way to file your taxes. Sites such as Credit Karma, TurboTax, and H&R Block are just a few of the online tax e-filing sites available. Check out this list of “The 5 Best Tax Software Programs for 2019” to compare the software and decide what is best for you. Most software will audit your entries and indicate any errors before you submit. Using the online filing option also allows you to import your W-2 data to avoid errors, save time, and avoid the tedious work of entering each and every number on your W-2.
Tip 4 – Extensions
If filing your taxes by the deadline seems impossible, don’t worry, you can file Form 4868 (available on most e-filing software) which is a 6-month filing extension. This form extends your filing deadline to October 15, 2019 and must be approved by April 15th. The failure-to-file penalty is 5% of the tax owed each month your return is late, up to a maximum of 25%. If you are certain that you will not receive a refund and on the contrary, you owe the government, this extension to file is not an extension to pay. If you file but fail to pay by April 15th, you will be charged just a 0.5% penalty on what you owe each month until you’ve paid it off.
If you’ve filed your return but cannot afford to pay your tax bill, you can apply for the IRS Online Payment Agreement. The IRS will let you know immediately whether your application has been approved.
Tip 5 – Tax Efficiency
One thing that we know, is that tax season comes around every year without hesitation. The best time to prepare for next tax season is NOW. Having everything in one place will help you avoid the last-minute shuffle next year. Get a file cabinet, an expanding file folder, a plastic bin, or even a shoebox and start gathering all of your important documents for next year. You can also utilize the withholdings calculator to determine how your W-4 should be adjusted now to avoid owing or the government owing you next year. Afterall, the best tax return to get is $0. A $0 tax return indicates that you paid your taxes timely and you did not give the government an interest free loan all year.
Ok Mommies, the clock is ticking. If you have not already, set aside some time this week to get your taxes filed. Who has already filed their taxes? Any other tips you’d like to share with our Mommies racing the clock?
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Mommi Mykal
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