Spring is here, and so is the end of tax season! There are just over two weeks left to get your taxes done on time. If you still haven't filed, here are some tips to help during these last two weeks.
Plan your time wisely, choose a date and time to commit to filing, and stick to your appointment. If you're due a refund, don't leave your money with the IRS when you can file and get that money back now; it is far better in your bank account accruing interest or spent on something you need. The IRS is not the place to leave your money when you think about long-term financial planning or just doing something nice or fun for yourself, your family or someone important.
Once you've set a date, locate your tax documents such as your W-2s, any 1099s and records of any deductions such as tuition and fees for yourself, spouse and dependents, mortgage interest and real estate taxes, charitable contributions, and medical expenses. A great "best practice" is to use a copy of last year's tax return to help get your records together. Don't forget to gather together your unreimbursed employee expenses such as licensing fees, continuing education fees, subscriptions to trade journals or magazines, professional organizations, union dues and receipts for tools necessary to do your job. Better yet, go to your favorite tax website and print out a few of the "get started" checklists. There are lists for tax documents to be mindful of, checklists for overlooked and forgotten tax deductions, checklists for often overlooked tax credits and even checklists for specific jobs or occupations that have unique tax considerations. Checklists are a great way to jog your memory and tax time and help you get organized.
Consider ways to lower your tax liability. Here is a quick and easy consideration applicable to millions of tax filers. If your income is less than $58,000 ($92,000 if married filing jointly), you should be able to make a deductible contribution to a traditional IRA and lower your taxes for 2012. This will reduce your gross income, lowering the amount you owe the IRS and potentially increasing your refund or lowering the amount you owe on April 15. At the same time, you'll be putting some money away to grow tax free and help you at retirement.
Another way to make the most of tax time is to be on the lookout for your life changes over the past year that may drive new tax benefits, such as getting married, divorced or adopting a child/children. There are many others that have an equally large and positive impact on your tax refund, including taking care of a dependent parent or family member, starting a new business, going back to school and many others.
When you're ready to file, make sure to E-file (electronically file). It's faster, safer and more accurate. Plus, it's free either with the IRS free-file program, a tax software purchase or with most tax professionals. Do not pay to E-file your tax return -- that is usually a sign you have the wrong preparer or the wrong software.
If you're planning to file an extension because you might owe taxes, you should know that an extension only extends the deadline for the forms to be filed. It is not an extension to pay your any taxes you owe. Even with an extension, you still must pay your taxes by April 15. If you don't pay by April 15, you'll be assessed a penalty and interest on the amount you owe until it is paid in full. If you're filing for an extension, you already have your tax information together, and you've determined if you have to pay and how much, why not just file your taxes and mark it off your to-do list?
If you've already filed and are concerned that you may have missed something, there are plenty of professional preparers who offer a free review to see if you missed anything. If they're able to find additional deductions or credits, then you still have time to file an amendment. You can even go back as many as three years to fix your tax returns and add an overlooked benefit, deduction or tax credit you left off.
It really is getting to be crunch time to file your taxes. That will be a good thing for millions of taxpayers who are due a refund. For the rest of us who will owe taxes this year, at least we will get it done and off the "to do" list until next year.