As tax season is underway and the April 15 deadline looms menacingly on the horizon, many Americans have yet to prepare their taxes. Annually, over 100 million Americans file taxes; out of those, the IRS reports that 20 to 25 percent of filers wait until April to prepare tax returns.
With a little over 5 weeks remaining in official tax season, there are still a handful of things you can do to dodge filing for an extension or being caught in the first weeks of April rushing and chancing avoidable oversights. Once April rolls around, there is little you can do regarding taxes; according to Turbo Tax, there are only two options left at that point, “File your taxes pronto, or request an extension.”
Below are a few suggestions for those who have a tendency to wait this late in the season.
Acknowledge The Situation And Act
Regardless of why your tax forms have yet to be submitted, inaction only intensifies the situation. Whether you wait purposefully in order to maximize interest sums right up until the last moment or your procrastination is due to life overwhelmingly distracting you, at this point in the season, it is necessary to acknowledge that you will have to do taxes sooner rather than later.
Avoidance does not equate exemption, and eventually, you will have to file. To the IRS, ignorance and procrastination are no different from deliberate tax evasion.
Ideally, organization is a way of life and everything needed for filing is in a single, accessible place. If not, make sure to get organized now. Being organized means locating and compiling the following items, as they apply to you:
- Social Security Number of yourself, co-filer and dependents
- Routing and Account Numbers (for direct deposit information)
- W-2 Forms (shows earnings and withheld taxes)
- Form 1099-INT (shows interest earned on bank accounts)
- Form 1099-G (income from state/local income tax refunds/unemployment)
- Form 1099-R, 8606 (IRA/pension distributions)
- SSA-1099 (benefits specifically from Social Security)
- Form 1099-DIV (dividend income earned)
- Form 1099-B (bonds, stocks, mutual fund shares’ sale proceeds)
- Form 1099-SA (funds withdrawn from health savings accounts)
- Form 1098 /Mortgage Interest Statement (shows interest paid on mortgage loans)
- Form 1098-T (educational expenses/tuition)
- Rental Property Income/Expense
- Alimony Amounts
- Jury Duty Income
- Gaming Winnings
- Healthcare Receipts (for deductions)
- Medical Savings Account Income
- Business-Related Expense Receipts (for deductions)
- Educational Receipts (for deductions)
- Student Loan Interest
- Taxes paid throughout the year, including state, local, real estate and personal property taxes
When Filing, Don’t Forget…
Being organized is only the first step to filing taxes. Without execution, a checklist is only as good as a hacksaw handled by an inexperienced individual.
If you have a traditional IRA or 401(k), make sure to take the required minimum distribution. If you do not know your RMD, there are secure calculators and worksheets available online to help you determine the appropriate amounts.
If you are not planning on taking the standard deduction, look for applicable deductions and credits. Some frequently overlooked expenses for itemized deductions and credits include:
- Advance Child Tax Credit payment
- Child Care costs
- Charitable donations
- Casualty/Theft losses
- Union dues
- Unreimbursed employee expenses
- Medical/Dental expenses
Additionally, make sure to check your work before submitting. Double check your math. Double check SS numbers. Sign and date all documents.
According to Turbo Tax, the three most common mistakes are math errors, illegible social security numbers and no endorsements by the filer.
Finally, if at the end of calculating your taxes, you are required to pay the IRA instead of expecting a refund, make sure to include the payment with your tax forms.