9 Last Minute Tax Tips

With April 15th fast approaching, if you haven’t sat down to do your taxes yet, you certainly are not alone, but this weekend may be a good time to pound them out. If you still need to file for last year, here are 9 tips that may make things easier on you:

1. Don’t panic

So, you’re one of the roughly 4.5 million Americans who waits until the final month to file your taxes and you’re running out of time. Well, the first thing to do is relax! You’re not alone and you still have a week and a half to get everything done. While the clock certainly is ticking, taking the time to get everything in order and file your return now instead of hastily waiting until 10pm on April 14th is going to give you piece of mind and perhaps save you a few dollars as well.

2. Get organized

Instead of worrying about the number crunching and paperwork off the bat, it’s best to take some time and collect all of the financial records you’ve been keeping for the last year. If you’re like most Americans, chances are good that everything isn’t in a nice neat file in the filing cabinet. That’s ok. It’s important to at least find the big stuff- returns from last year, W2s, 1099s, and personal identification information. That’s usually the minimum you’ll need to file a clean return. If you itemize deductions, then you’ll want to make sure that you have all additional records relating to those deductions- for example, homeowners with mortgage interest to deduct should make sure they have a Form 1098.

3. File electronically

Save yourself time and hassle by filing online. There are a number of websites like TurboTax that will let you file your federal return free of charge. Otherwise, you can also file directly with the IRS with its Free File program. Filing electronically enables gives you access to software that will do some automatic calculations and ensure that you’ve filled in all required figures. Plus, you can sign up to receive your refund by direct deposit and won’t have to worry about waiting in long post office lines to send in your return.  

4. Remember credits and deductions

There are tons of credits and deductions which you may qualify for. If you do, then by all means you should claim them. But a word of caution is in order: don’t claim something you can’t back up with your records. In the event of an audit, taking deductions you can’t back up could cost you significantly. Also, be specific when entering numbers. While rounding to the nearest dollar may be ok, if the IRS sees every claimed deduction rounded to the nearest $10 that may raise a red flag.

5. Double-check you numbers

It’s definitely important to double-check monetary figures, credits and deductions  for accuracy to avoid raising any red flags with the IRS, but don’t forget to take a second look at everything else as well. Make sure social security numbers are accurate, including those of any dependents you’re claiming. Otherwise, you could risk not receiving a deduction for them. Also be sure to double-check bank account and routing numbers if you’re enrolling in direct deposit for your refund to make sure it gets to you as soon as possible.

6. Don’t forget all applicable schedules

The 1040 is just the beginning of your filing, and unless your return is incredibly simple, chances are that you’ll have to attach additional forms or schedules for your return to be accepted. There are dozens of forms published by the IRS, but it’s likely that you’ll only need to consider some of the more common forms. A few of the more common schedules and forms are:

Schedule A is required for itemized deductions

Schedule B is required for interest and ordinary dividend reporting

Schedule C is required for business profits

Schedule D is required for reporting capital gains and losses

Schedule EIC is required to claim the Earned Income Credit

Schedule SE is required to report any self-employment tax

Form 1040ES is required for any business owners required to make estimated tax payments

Form 2441 is required to report and claimed child and dependent care expenses

Form 5405 is required to claim the first time homebuyer credit

Form 8396 is required to claim the mortgage interest credit

Take the time after completing your return to make sure that all required schedules and forms are included in your filing. Otherwise, you may need to amend the filing and will see a delay in receiving your refund.

7. Remember to file at the state level

Unless you live in a state with no income tax, once you file your federal return, you’re only half way done. All but 7 states (Alaska, Florida, Nevada, South, Dakota, Texas, Washington and Wyoming) collect income tax at the state level. Be sure to visit your state’s Department of Revenue site for information on how to file. The good news is that most states allow e-filing and you should be able to carry over a lot of the information from your federal return.

8. Ask for an extension if you need more time

While every effort should be made to get your return filed by the deadline, if you just can’t swing it, then make sure to ask for an extension. Failing to file and not asking for an extension will lead to trouble, fines, and who knows what else. You must file for an extension by the April 15 deadline. And remember, this is just an extension to file, not an extension to pay, so you will owe interest on any tax due which isn’t paid by April 15. An extension can be requested through the IRS’s Free File system. Otherwise, Form 4868 can be mailed in (postmarked by the deadline). If you are going to owe tax, it’s smart to pay now to avoid any interest accruing. If you can’t afford the entire amount it’s still best to pay what you can in order to reduce any subsequent interest you may owe later.

9. Get professional help

Finally, if you feel like you’re in over your head get help, but make sure to do it now as tax professionals are already bogged down with last minute filings.

Michael F. Brennan is an attorney at the Virtual Attorney™ a virtual law office helping clients in Illinois, Wisconsin, and Minnesota with estate planning. He has a background in tax law and a registered individual tax preparer with the IRS. If you’d like help filing your 2012 return he can be reached at michael.brennan@mfblegal.com with questions or comments, or check out his website at www.thevirtualattorney.com.

The information contained herein is intended for informational purposes only and is not legal advice, nor is it intended to create an attorney-client relationship. For specific legal advice regarding a specific legal issue please contact me or another attorney for assistance.

IRS Circular 230 Disclaimer: Pursuant to regulations governing the practice of attorneys, certified public accountants, enrolled agents, enrolled actuaries and appraisers before the Internal Revenue Service, unless otherwise expressly stated, any U.S. federal or state tax advice in this communication (including attachments) is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of (i) avoiding penalties that may be imposed under federal or state law or (ii) promoting, marketing or recommending to another party any transaction or tax-related matter(s) addressed herein.

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