Tax Tips for Last-Minute Filers
Tax Day is fast approaching. You have a little more time this year, until April 18, due to a federal holiday falling on the 15th. But you might be panicking if you still haven’t filed your tax return yet, either because you just put it off or you don’t have all of your documents ready. Chances are that you may actually be ready to file and didn’t know it. Here’s what you can at the absolute last minute to see if you can file now, or make arrangements to take a six-month extension.
Look over last year’s tax return and note any major life changes.
This is the very first thing you should do because it provides a road map for what this year’s return could look like. Major life changes like buying a home, getting married, having a child, moving for a job, and starting to freelance or open your own business will drastically change your tax situation. Look over last year’s return so you can both note income and deductions you had last year and compare your life situation to what it is now.
Check that your W-2 and 1099 forms have the correct amounts reported on them.
Contact the issuers if any amounts are incorrect. You need to file your tax return with the correct amounts on those forms aligning with what you have on your tax return. If you file in a hurry to meet the deadline, you’ll wind up getting IRS notices later. It’s best to go on extension while you wait for the corrected versions of the forms.
Keep copies of all documents that you send or report to the IRS in a place where you can easily find and reference them.
In the event that you get a notice from the IRS suspecting that you underreported your income, or overstated deductions and business expenses, you should have copies of everything used to prepare your taxes. Keep this information in a place you can easily find it so that you don’t get stressed out if you need to respond to a notice.
If you’re married, consider whether it’s worth it to file separate returns or a joint one.
Some couples have their preferences to file jointly or separately irrespective of the outcome, such as a wish to keep finances separate. While married filing separately is often the least beneficial filing status, some married couples find that they have significant tax savings if they file separately. Test out both statuses and see which one is going to offer the most benefits.
Don’t forget that you are also considered married for the entire year even if your wedding was on New Year’s Eve.
Double-check your dependents.
You may be overlooking people eligible to be your dependent such as a child whose adoption to your family has just finalized, a college-age child you’re financially supporting who doesn’t live at home most of the year, or an elderly parent whose nursing home you are paying for.
In the case of extended and blended families, you may be accidentally claiming an ineligible dependent based on the residency and relationship rules or if someone else already claims that dependent. There are also special tie-breaker rules for dependents who have multiple people supporting them based on relationship and income.
Tax experts near Mechanicsville, Virginia
Rue & Associates is available year-round to assist you with all of your tax matters, whether you have a lot of time to spare or you’re rushing to get your returns done at the last minute. Contact us today to speak to one of our friendly and professional tax law associates.