Healthy Living

8 last minute tax tips to save money

You’re not alone if you find yourself waiting until the last minute to file your taxes. The IRS reports that over 10 million Americans waited until the final few days of the 2015 tax year to file their taxes. Whether you’re delaying because you fear the inevitable or have simply been busy, you still have time to file your taxes.

If you need to prepare your taxes, these last-minute tax tips will help you save money this year, and down the road.

Know When You Must Submit Your Taxes

This year, tax day is on April 17 because April 15 falls on the weekend and April 16 is a holiday in Washington D.C.. That means you have an extra two days this year to file your taxes.

It’s understandable why you’d want to delay doing your taxes, or even not submit them on time, because of anticipated discomfort. Giving into this emotion will only hurt more, financially speaking. Not filing on time will likely cause you to incur penalties and interest charges.

If you owe taxes, don’t avoid submitting your taxes. File on time, and pay what you can. Submitting on time will make it easier to negotiate payment arrangements and reduce fees and interest.

If you can’t file on time, you can also consider an extension. “Filing for an extension for time to file is an option that will allow for an additional six months to file the proper paperwork with the IRS; but this extension is only an extension to file the paperwork – the tax that should be paid is due without an extension available,” says Samuel Hicks CPA, MST of Stern, Kory, Sreden & Morgan.

Just remember this only allows an extension of filing of paperwork. You will still owe on April 17, but it can be far less than simply avoiding payment altogether.

Get Everything in Order and Know Where to File

The most important thing to filing your taxes is having all your paperwork together. Not having all your information in one place makes it easier to misreport an item. Common tax documents can include the following:

  • W-2s from your job
  • 1099s related to investment income
  • SSA-1099 for Social Security benefits
  • Business or farming income

You may have other documents. As you find your documents, make sure to come up with a system to collect them for next year to help make filing taxes simpler.

Once you get everything in order, determine if you want to file taxes on your own or pay someone to do it. If you made under $66,000 in 2017, the IRS allows you to file for free through IRS Free File.

If you don’t go that route, many online platforms make filing taxes relatively simple. “Depending on your comfort with filing taxes you may be able to complete taxes quickly, without missing any tax savings opportunities. Many software platforms allow you to spend less than an hour putting together a filing that can be sent and accepted by the IRS in a very short amount of time,” says Hicks. You have plenty of options to consider, so find the one that works best for you and start working.

Easy Deductions You Can Take

Deductions are one of the best ways to reduce your taxable burden. There are many available deductions that let you save money on taxes and help you financially. Here are some easy deductions to consider:

Retirement savings: Saving for retirement is one of the best ways to lower your taxes. Many retirement accounts allow you to contribute up to April 17 and have it reduce your taxes.

Health Savings Accounts (HSAs): If you have a High Deductible Health Plan (HDHP) you may be able to contribute funds to an HSA to help with medical expenses. Like many retirement accounts, you can fund an HSA until the tax deadline and still have it count for the 2017 tax year.

Student loan interest: The IRS allows you to deduct student loan interest, up to $2,500. If you or your spouse have student loans that you’re paying on and meet the qualifications this is a great way to help reduce your taxable burden.

Overlooked Deductions Not to Miss

The last thing you want to do is overlook a deduction that can save money on taxes. There are many overlooked tax deductions; you just need to know what qualifies. Here are some common ones:

Charitable contributions: Did you give to a charity last year? This can include items you donated or out-of-pocket costs while doing something for a charity or nonprofit organization. The good you do for others may be good for you too by lowering your taxes.

Home office expenses: Do you run a business out of your home? You might be able to deduct certain expenses. “A flat square footage deduction is available, or a portion of the actual expenses can be reported as deductions,” says Hicks.

Moving expenses to take your first job: If you moved last year to take your first professional job, you might be able to deduct those expenses. Actual job-hunting expenses are not deductible, but moving expenses are if you had to relocate.

Just keep in mind when you look for a deduction to have proper documentation to back up your claims. Additionally, make sure to consult a tax professional if you have specific questions.

Filing taxes can be an overwhelming feeling. However, by following a few simple steps, you can make it less painful and can have confidence that they’re done right.

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