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Still Haven’t Filed? Use These Last-Minute Tax Tips

Written by Jeffrey Trull

last-minute-tax-tipsWith taxes due in less than three weeks, you’re officially a tax procrastinator if you haven’t filed yet. But that doesn’t mean you have to be a last-second tax filer that waits until the final hours before the April 15 midnight deadline.

No matter what your excuse for waiting to do your taxes, here are a few last-minute tax tips to get your return in on time without hassle.

Just get started

You don’t have to sit and complete your return in one shot. It’s easier to break up the work, and getting started sooner lets you fill out your return more carefully. Many tax software options let you save progress at any stage. If you find forms are missing, you’ll have more time to locate them.

Looking for more motivation to start? Get fired up for a refund. According to the IRS, about 75% of taxpayers are expected to get one this year. If you want to take a peek at what your tax refund could be, check out TaxCaster. By filling in a few fields, you’ll be able to see your estimated refund.

Use software to file faster

Tax software offers key advantages over filling out your return by hand. These include:

  • No calculations, fewer mistakes. With tax software, you don’t have to bust out the calculator. Just fill in the boxes as instructed, and the math is done for you.
  • Ability to e-file. With e-filing, you don’t have to deal with mailing your return. Plus, by e-filing, your refund should arrive within 21 days.
  • Faster. Combined with the two points above, using software takes less time than writing and calculating by hand. With SnapTax, you can have your return completed in as little as 10 minutes.
  • Free. Thanks to the IRS Free File system, taxpayers with an income of $57,000 or less can use name-brand software and e-file a federal return for free. Options include TurboTax, TaxSlayer, H&R Block, and more. Each company offers different eligibility, so find the best fit for your return.

If you need additional assistance, the IRS VITA Program offers help to those earning $51,000 or less.

Contribute to an IRA

Funding an IRA, whether the traditional version or a Roth, can be a big win now and in the future.

Daily Finance reports that contributing $5,000 to a Roth IRA now could be worth more than$100,000 when invested for 40 years at an assumed rate of return of 8%.

A traditional IRA will earn you a tax deduction now, which is one of the few options you have left to claim a deduction since the 2012 calendar year ended.

The catch for either option is you have to make an IRA contribution by April 15 to count for the 2012 tax year. After that, your contribution will be counted towards the 2013 limits, which have been raised to $5,500.

Don’t fail to file

If you haven’t filed by April 15, don’t do nothing. The IRS suggests taking other action, which can lessen or eliminate penalties.

Send in your return if you can. If you can’t get it done, file for an extension. You can do so using IRS Form 4868 or with the free TurboTax extension tool.

Either way, if you can’t pay everything you owe, the IRS advises to pay whatever you can to minimize penalties.

Failure to file penalties are much more harsh than failure to pay penalties. If you file your return but don’t pay everything you owe, you’ll be hit with a 0.5% penalty each month, up to 25% of the total you owe. If you skip filing, the penalty jumps to 5% per month.

If you owe a large amount, the IRS may file a tax lien against you. This could mean serious damage for your credit score. Avoid this by paying all that you can afford to and applying for an installment agreement. Most taxpayers who owe less than $50,000 are eligible and can get instant approval.

Get a jump on next year’s return now

Didn’t enjoy dealing with your taxes last-minute? Next year, be better prepared so you can get your return in earlier.

If you chose to file with software, save your login information. Many online tax software providers will transfer your information from year to year, meaning you don’t have to type in all your personal or W-2 info again.

Track receipts throughout the year. For any charitable gifts, use a spreadsheet or scan them to save a digital copy. iPhone users can download the iDonatedIt app and snap pictures on your phone.

For business owners, do the same for any eligible expenses. Shoeboxed.com helps organize receipts and expenses digitally so you’re not left with dozens of paper copies to input next tax season.

Adjust withholding for 2013

Getting a huge refund can be a nice surprise, but if you struggled and lived paycheck to paycheck throughout the year, it’s probably better not to wait until tax season to get your money back. Adjust your withholding using the IRS withholding calculator so taxes deducted from your paycheck throughout the year are more accurate.

Take this step immediately to correct your withholding for the rest of the year, as we’re already one-quarter of the way through the year!

For more, see our guide to filing your taxes.

(image: julianlimjl)

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