Most years, I’m what the IRS (probably) calls an "early bird panicker." I file early, wait by the mailbox for their response, and promptly do whatever they tell me to do.
My brother, on the other hand, is what the IRS (absolutely) calls a "last-minute filer." If it’s down to the 11th hour when he pushes "send," he acts like he's just scored a touchdown.
If you can relate, these last-minute tips can help you save right up to the final seconds!
1. File online.
There are so many advantages to filing online. One, the IRS recommends it (and we all want to keep the IRS happy to avoid the dreaded "audit"). Two, it’s easier since the software guides you through the filing process (some software even prompts you for things you may have forgotten to add in!).
But perhaps the most compelling reason to file online is that you can save money on tax preparation costs—an average of $100 per filing, according to U.S. News Money.
2. Don't assume anything when it comes to itemizing.
I know that the more I’m rushing to finish something, the more corners I feel tempted to cut. Here, assumptions can cost you. Take time to add up your charitable contributions and other eligible expenses. If the total is more than the IRS standard deductions ($6,100 for filing singly, $12,200 for married filing jointly) you just lowered your tax bill!
Note: The IRS states that three-quarters of filers just use the standard deduction without checking.
3. Choose direct deposit when you e-file.
Let's assume that you’re getting a refund. Would you rather get your refund deposited into your bank account in 9-21 days, or get a check in the mail in 6-8 weeks? Not only will you ease any worry about the check getting lost in the mail, stolen or otherwise misplaced, but your refund will arrive FAST.
The faster you get your refund, the faster it can be earning you interest, paying down debt or enjoying fun times your hard work has earned!
4. Remember the "gimme" deductions many people forget.
I remember the year I was going to go back to grad school. I took a couple of preparatory courses and spent about $2,500. I didn't make it to grad school (yet again) but I sure did enjoy taking my Lifetime Learning credit that year at tax time!
Plus, taking a college course can be useful for other things besides pursuing a graduate degree—it can beef up your resume, help you network, introduce you to a new potential career, and best of all—it gives you a tax write-off in April each year!
5. Make a contribution to your traditional IRA, SEP IRA or HSP.
If you find yourself with more earnings than you’re comfortable paying taxes on, there’s an easy fix—make a lump sum contribution to your traditional (NOT Roth), SEP (self-employment) IRA or HSP (health savings plan)…so long as these plans were established by December 31 of the prior year and you’re younger than 70.5 years old.
Why do this? Because your contributions to each of these funds are tax-exempt and can reduce your taxable income by the amount you contribute (up to IRS allowed limits for each).
One catch—you must make your contribution by the end of the day on April 15th for it to qualify; however, you don't have to wait to make your contribution to file!
6. Don't wait to file if you owe more than you can pay right now.
If you think you owe a lot now, wait until you add in the IRS penalties for late filing and late payment of what’s owed. It’s better to file now in every way. Even filing for an extension will only give you six months to file—it doesn’t alleviate your burden to pay at least 90% of what you owe by the annual filing deadline.
If you owe and don't file by the deadline, you’ll pay a late-filing 5% penalty for each month you’re late—up to 25% of your total tax bill in penalties alone!
Plus, the IRS will work with you if you need to pay in installments. You can get an installment plan for up to six years.
7. Don't forget about losses.
This is a huge oops for many rushed last-minute taxpayers. Just as income can raise your tax burden, losses can reduce it.
Eligible losses can include small business expenses that are greater than annual income, gambling losses that are greater than winnings, and capital investment losses that are greater than gains.
8. Check if you can get free tax preparation services.
If you made $53,000 or less, you can get free tax preparation through the IRS's VITA Program.
If you made $60,000 or less, you can file using the IRS's Free File software program.
This can save you $100-$300, depending on the complexity of your return.