Tax tips for the eleventh hour
Originally published April 8, 2015.
If you haven’t filed your taxes, here are some last minute dos and don’ts to help you get the most out of your refund.
DO: Plan your time wisely. You don't have much time left, and rushing through the process will make it easier to overlook important elements of your return. Pick a day and time to get your taxes done and stick to it. Get all your essential tax documents together, like W-2s and 1099s. Best practice is to use a copy of last year’s return to help you get your records together.
Lower your tax liability. There’s still time to reduce your tax liability, albeit not much. Making a contribution to a traditional IRA will reduce your gross income, potentially lower the amount you owe the IRS and increase your refund. Plus, you’re putting money away for retirement, and that’s never a bad thing.
Be on the lookout for life changes. Make the most of tax time by being aware of life changes that will drive new tax benefits, like marriage, divorce, adopting a child or taking care of a dependent parent. There are plenty more, too. So take some time to figure out what changes have happened in your life that may reduce your tax burden.
File electronically. E-filing is the fastest, safest and most accurate way to file your taxes. It’s free with IRS free-file system, a tax software purchase, or with most professionals.
Overlook income. Even if you didn’t get a W-2 or 1099 from an employer, you’re still required to claim that income. Last-minute filers often forget to claim some type of income, and the IRS can catch it pretty easily.
Forget to double check numbers and sign. According to the IRS, one of the most common tax mistakes is an incorrect Social Security number. Before you file, double check you haven’t transposed any numbers. Make sure you’ve entered bank account information accurately if you’re opting to receive your refund as a direct deposit.
Your return isn’t valid if it isn’t signed, so make sure you and your spouse have signed if you’re filing jointly.
Get a pre-paid debit card. If you qualify for a refund, opt for direct deposit. Pre-paid debit cards often come with a lot of unexpected fees for things like activation, transactions, and customer service. Some national tax preparation companies may offer an option to receive your refund faster with a prepaid card, but you’ll get more in the long run by waiting.
If you waited to file your taxes because you have no idea what to do, or you’re truly overwhelmed, you’ll benefit from finding a good preparer. It’s better to get help than get audited. If you’ve already filed and you’re afraid you may have missed something, many tax preparers will review your return for free.