GOLDEN VALLEY, Minn. — The countdown is on. Tax Day will be here before we know it. We all know the deadline is April 15th, but so many of us are still waiting until the last minute. Whatever your reason, you can’t procrastinate any longer. It’s time to get down to business. Justin Halverson from Great Waters Financial shared 5 tips for last-minute filers.
- Gather all the necessary documents. By now you should have all of your tax-related documents such as a W-2 from your employer, 1099 from other sources of income and a 1095 form proving health insurance coverage.
- The tax deadline rarely changes, but depending on where you live it could be different. This year it’s April 15th.
- If you miss this deadline there are two penalties the IRS charges fees for: a late filing fee and a late payment fee.
- If you can’t get all of your paperwork together by the deadline, an extension will give you an extra 6 months to file. I have a link to the extension form on my website.
- Don’t forget, even if you file for an extension, you can still get hit with a late payment fee if you owe money on your taxes.
- Filing electronically is easy and fast. You can get your money quicker by using direct deposit. Direct deposit is also a safer way to get your money because your check isn’t sitting in your mailbox.
- You can use freefile on the IRS website if you file a qualifying return. Or you can e-file with one of several different tax filing companies.
- Depending on your annual salary, some of these sites will allow you to file your state and federal taxes for free, but most people will have to pay some sort of fee.
CHECK FOR ERRORS
- Be careful entering numbers from your documents. The IRS says some of the most common mistakes are wrong or missing numbers like your Social Security number.
- If you’re using tax software, it will tell you of a math error, but it won’t know if you entered the number incorrectly.
- Double check your bank account and routing number if you’re using direct deposit.
- This could cause you to lose your refund entirely. There is no IRS procedure for replacing lost electronically transferred funds.
- Take a break, then double check your return. Errors can cost you money in your tax refund or flag you for an audit.
- Also, ask a trusted friend or family member to review it.
LAST-MINUTE RETIREMENT DEDUCTIONS
- There is still time to lower your tax bill by increasing your retirement savings.
- The money you contribute to a 401(k) or IRA is not included in your taxable income. That means your taxes could be reduced.
- Younger workers are capped at saving $5,500 in their IRAs for 2018. However, workers 50 and older can put $6,500 into an IRA.
- You can contribute money to your retirement accounts until April 15th for your 2018 taxes.
PLAN FOR NEXT YEAR
- Make sure you are withholding the right amount out of your paycheck.
- A lot of people are withholding too much and getting a big refund each year. But that’s your money the government is holding interest free year-round.
- If you withhold too little, you’ll owe at tax time.
- Ideally, you want to have just enough withheld so that the amount will come as close as possible to your actual tax liability for the year.
- You can make changes at any time by filling out a W-4 with your employer.
- The IRS released a calculator to help you determine your withholding. You can find it on my website.