With two weeks to go, tax season is quickly coming to a close. If you waited until the last minute to file, you may be in full-blown panic mode. But before you worry yourself into a frenzy—stop and breathe. You aren’t the only one. Last year, nearly one-fourth of Americans who filed their taxes on time did so within the last two weeks before the deadline, according to the IRS.(1,2)
Some of our readers shared their own accounts of procrastination and the tough lessons they learned from putting off the inevitable. Don’t make the same mistakes. Get started today and follow these simple steps to make tax time less stressful.
Don’t Fool Yourself Into Not Filing
Let’s get one thing straight right off the bat: Ignoring your tax obligation won’t make it go away. Michael M. made that mistake twice and vows never to let it happen again. "For the past two years we have filed on October 15, late. Why? Because I’ve been unorganized and haven’t prioritized. The results? I’ve wasted $150–200 in interest."
If you’re part of the group that still hasn’t done their taxes, we have some good news: The 2017 tax return deadline is April 17—that’s two extra days to file! However, if you fail to file by that date, here’s what will happen:
So what if you can’t pay your tax bill and didn’t file an extension? Work with a tax pro to file as soon as possible! Why? Because the late-filing penalty can be 10 times more than the late-payment penalty. The sooner you file, the less you’ll have to pay!
Do Get Organized
We know tracking down paperwork isn’t the most relaxing way to spend your free time. But it’s a necessary part of filing your taxes—and loads more fun than the alternative. So why not go ahead and just get it out of the way? We promise you’ll feel better when it’s done.
Here are a few of the documents you may need to gather:
While you’re at it, start a folder for next year’s taxes and file documents as you receive them through the year. This tip helped Emily H. go from steadfast procrastinator to early filer. "We’ve procrastinated year after year. The biggest lesson learned? I need to set up a filing system to keep the receipts I want to find for tax purposes."
This year, Emily handed over all her tax documents to her CPA months before the deadline. "If we file for an extension this year, it will be because our CPA needs it, not us."
Don’t Let a Time Crunch Cost You Money
With the tax clock ticking, it’s tempting to take the standard deduction and call it a day. After all, adding up all your individual deductions—whether it’s medical expenses or state and local taxes—takes time.
But if your expenses in these categories add up to more than your standard deduction, itemizing is your best bet. Why? Because every deduction you claim reduces the amount of income you’re taxed on, lowering your tax bill.
Want help itemizing your deductions? Ask an experienced tax advisor for advice. But keep in mind that tax pros are busy this time of year, so don’t wait to make an appointment!
Do Consider an Extension
Start now, and you should have plenty of time to file your taxes. If you’re missing documentation, however—or something other than procrastination keeps you from hitting the deadline—you can request a six-month extension. Simply fill out IRS Form 4868 and submit it to the IRS by April 17, 2018.
Just be aware that an extension doesn’t buy you more time to pay your tax bill. It simply gives you more time to file. When you request an extension, you must estimate your tax liability (if any) and send payment with your request. You’ll be charged penalties and interest on the amount you owe after April 17, 2018.
Can’t cover it all by the deadline? Pay as much as you can when you file for an extension, and try to knock out the balance before the IRS contacts you, which usually takes 30–60 days. If you can’t pay it off by then, the IRS will likely allow you to pay the rest in monthly installments.
Don’t Skimp on Service
When you’re in a hurry to file your taxes, tax software or an online service may seem like the perfect solution to get the job done. After all, it’s quick, easy and cheap! But can you ever really be sure the computer got it right? What if you enter the wrong information or miss out on a deduction you never knew you qualified for? It happens, and it could cost you big bucks.
A quick tax-prep shop isn’t much better. Sure, you have real people looking at your tax return. But filling out the forms is about as far as their expertise goes. If you want nitty-gritty tax advice on what credits and deductions you qualify for, you’ll need a pro.
Filing your taxes late can become a bit of a headache but it doesn't have to be. Just make sure to use these tips if you'll be filing in the next two weeks and it should be a breeze. And as always, please let me know if you have any questions and I will be happy to assist!
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