Tax Time: Under the Deadline

Tax Time: Under the Deadline

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Your taxes are done and filed, right? Oh, if only that were true!

Instead, you are looking ahead by just a few weeks and see the April 15 tax filing deadline drawing close with a feeling that you won’t get your taxes done on time. Relax, even if you have a few loose ends that won’t be tied before that date you can request an automatic extension that will put off tax filing until Oct. 15. Keep in mind, however, the IRS requires you to pay what you owe by April 15, however.

Unless you already have a date with your accountant lined up, you probably will have to go it alone over the coming weeks. Here’s what you can do to get your taxes done on time.

1. Buy a tax software program. Few people who file taxes and claim deductions can manage all the schedules, forms, and related documents needed to file their taxes properly. Fortunately, there are several tax software programs that can assist you including TurboTax, H&R Block, TaxACT, TaxSlayer, and eSmart Tax. The order that we mentioned the programs in corresponds with popularity — choose the program that is right for you.

2. Gather your forms. You should have received your W-2 and 1099 forms by Jan. 31. There are a few exceptions to allow later delivery, but most tax documents are due sooner, rather than later. You need to determine if you have each form. It is good to keep a manila envelope or folder with your tax information, creating a checklist to mark off each item as mailed or emailed to you. If a form is missing, contact the company or individual and ask that one be sent out to you immediately. You may need to press this matter to get a response.

3. Pull together your banking and investment documentation. Other forms that are sent out cover your interest earned through banking and investments. This includes your monthly statements which show how much money you contributed for your investments. Note that earned income is taxable, while gift contributions are not. That means the $11,000 gift from your parents shouldn’t be taxed. Go through your statements and circle any items that are not taxable.

4. Your family members. If you file and claim just yourself, then your tax filing is easier. For people that claim dependents, you’ll need some information about each person. Likely, you’ve been tracking that information all along. For a new addition to your home including a baby or an adopted child you’ll need a Social Security Number. If you haven’t applied for one, do so immediately, as you’re eligible for a $1,000 tax credit for every child you support under the age of 17. The tax credit is for individuals with an income of under $75,000 per year or $110,000 when filing jointly. Also, if you have adopted, there is an adoption tax credit available. Use your tax software program to see how that benefits you.

5. Go over your receipts. There are many deductions you can take for items purchased. Note that unreimbursed work-related expenses may be deductible including company trips you took with some expenses not covered (e.g., meals, personal use of car, lodging). Other deductible expenses can include a new computer that you use for business, a home business office, office supplies, a business cell phone, and related expenses. Know what is deductible and what is not — do not open yourself up to a possible IRS audit by claiming something you know that you cannot.

6. Review your charitable donations. One area where deductions can be taken and are sometimes not counted correctly are donations to charitable organizations. Not every group or organization counts as a nonprofit, but chances are your church, public service group, or other nonprofit organization is one. When in doubt, ask. You can deduct cash donations, but be careful here: if you put down a significant amount of money, the IRS may question your giving. That is why making a contribution with a check or a credit card reveals a paper trail. You can also deduct in-kind gifts such as clothing and household items made to a nonprofit thrift shop. Again, receipts can help.

7. Mortgage and equity loan/line documentation. If you finance your home, that is you have a home loan, the interest you paid the mortgage company or bank is deductible. You can also usually deduct interest paid for your home equity loan or home equity line of credit. In total, your home deductions could switch from someone who owes taxes to an individual that is due a refund.

Tax Considerations

There are other areas where receipts should be gathered including your medical expenses. You can deduct your portion of healthcare premiums not paid by your employer. You can also deduct physician office visit co-pays, prescriptions, and other medical expenses not covered elsewhere.

Finally, go over your previous year’s tax filing to find out if you have any carry over losses. This is easier to track with tax software, so invest in a program today. You can still visit a tax accountant, sharing the information you inputted to make tax filing easier for all involved.


Related Articles

Tax Tips for the Year Ahead

Business Travel Expenses and Tax Deductions

Ten Solid Ideas for Saving More Money in 2014

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