With April’s tax deadline so close now, many people are scrambling to make sure they have everything in order to pay their taxes. The IRS estimates that almost one third of American taxpayers file their taxes in the first two weeks of April — right before taxes are due. Due to the large amount of filers who wait until the last minute, these taxpayers typically have to wait longer for their returns to be processed, which may delay their refunds.
If you’re one of the people who waits until the last minute to file your taxes, have no fear: here are five tax tips if you’re filing taxes late to help you get your taxes in on time.
Filing your taxes online is a lot faster, and you’re much less likely to commit mathematical errors if there’s a program calculating your taxes for you. Although it’s still important to double-check your numbers, you’re less likely to make a costly mistake or a miscalculation if you file online.
Use a Tax Preparer
Better yet, use a tax preparer. Although you will need to get them the information sooner so they’ll be able to get the return in on time, you will save yourself a lot of time and many headaches by having someone prepare your taxes for you. Not only will a tax preparer know more about what deductions and credits you might qualify for — potentially saving you money — they will also be the ones who take the time to double-check your return for accuracy. If you’re a procrastinator, you’ll relieve a lot of tax-related stress by having someone else do your taxes for you.
Oh no! I Owe Money!
You’ve just made it through your calculations and realize you owe money. Is there any way out at the last minute? For the sake of speed, you may have cruised through your tax return without paying attention to which credits you qualify for. These include earned income credits for low- to middle-income taxpayers, child tax credits if you’re a parent, head of household status for single parents, and deductions for business-related expenses if you’re self-employed. If you have a home office that is a separate room, you can claim the square footage it takes up in your house.
It’s worth it to go back through again and make sure you’ve included everything that could possibly lower your tax burden. You could save yourself a lot of money in the long run.
It’s possible that you’ll save yourself money if your itemized deductions are more than the standard deduction for your filing status. If you’re scrambling to find ways to reduce your tax burden at the last minute, you should consider going back through your receipts to see if itemizing your deductions will save you money.
I’ll Never Do That Again
You waited until the last minute to do your taxes, and you regret it. If you want to make sure the same thing doesn’t happen again, start your taxes long before the tax deadline so you can make last-minute changes to lower your tax burden. If you have at least taken a look at your income and taxes paid before December 31 of the current tax year, you’ll have a lot more options to lower your tax burden. Even if you don’t touch your actual tax return until April, doing the following things in December can greatly affect how much you owe:
Pay More In Your Final Estimated Tax Payment
If you’re self-employed, calculate your total income for the year and compare it to how much you’ve made in quarterly payments. If you still expect to owe more than $1000, pay the difference in your last quarterly estimated tax payment (due January 15). This will eliminate the potential for owing a penalty for underpayment and save you the hassle of filling out several additional forms.
If you know you have stock or supplies to buy in the coming year, consider buying them before the year’s end to lower your total taxable income.
If you have clients or customers whom you bill for services and you run your business on a cash basis, consider waiting until the very end of December to send out bills. It will ensure you won’t receive payment until January. This way, the revenue won’t be included on that year’s taxes.
Donate to Charity
You can donate to charity to reduce your tax burden. Just be sure it’s an IRS-qualified 501(c) charity and that you make your donation before December 31.
It’s always best to plan ahead and not wait until the last minute for anything, but if you did put off your taxes until right before the deadline and are filing taxes late, these tax tips should help you make the best of it.
For more information on all things taxes, contact Liberty Tax® directly at 1-877-at-Liberty, or visit a conveniently located Liberty Tax® office near you. For real-time updates, follow Liberty Tax® on Facebook and Twitter.