Last Minute Tax Tips for Procrastinators

If you’ve waited until the last minute to do your taxes, you’re probably getting a little frazzled right about now. You’re in good company, albeit frazzled company. According to the Internal Revenue Service, a quarter of taxpayers wait until the last minute to file.

Kelli Grant, Senior Consumer Reporter for SmartMoney.com offered tips for the procrastinators among us in her report: Last Minute Tax Tips:  

• Save on tax preparation fees. Just like those folks who get big discounts when they purchase a Christmas tree on Christmas eve, the same applies for those who wait until the last minute to do their taxes. If you’re doing it yourself, look for business supply stores to discount the software in the neighborhood of 50 percent. If you have a simple return (no itemizations or self employment income), go to www.turbotax.com and you can get the federal version to file FREE.
• Free is the best kind of saving. The IRS offers a Free File program for efilers who have an adjusted gross income of $58,000 or less. The IRS estimates that 70 percent of taxpayers qualify for the free service. Go to www.irs.gov for information.
•  If you are missing paperwork and know you can’t get the information in time, file for an extension. Note that if you owe money, however, you must file what you think you owe at the time you file the extension. The only thing you are getting is a reprieve on is putting together the actual paperwork.

Bloomberg Businessweek’s  Ben Stevenson  had his share of hints on the Bloomberg blog:  

• If you owe money, write your social security number on the check to avoid any mix up.
•  If you owe money (which is why people put off filing until the last minute) make that  contribution to your IRA. Better to pay yourself than Uncle Sam. He says he’s broke, but you may be able to argue the same point, so give the money to yourself. If you’re self employed, take advantage of the higher contributions to offset what you’ll owe.

 While we’re discussing tips, we probably should discuss pitfalls and mistakes people make, particularly when they are rushing to complete the forms at the last minute.

• Double and triple check your social security number. One digit off, and your return will get held up.
• Math. Rushing causes us to make stupid mistakes which is one benefit of packaged tax software.
• Sign and date the return and sign and date the check if you owe money. This one sounds obvious, but again, when people are in a rush they're thrilled to just get the forms printed out.

Resources

Use an Investopedia checklist: The Ultimate Tax-Time.  

Or go right to the horse’s mouth at www.irs.gov for Top Ten Tax Tips.