Now is the time to file your taxes
The ominous April 15 deadline is looming overhead and it is time to take action. Let’s get those returns completed, taking full advantage of all approved deductions and credits and making sure our returns are error-free. The following tips will help expedite the process and possibly reduce your tax liability.
— Get free help. For those making less than $50,000 and who are filing a simple return, contact IRS VITA @ 1-800-906-9887 for details on how to get help. If you don’t qualify for free help and have the confidence to file your own taxes, you may want to use tax-prep software such as Turbo Tax or H&R Block. The benefit may likely outweigh the cost.
— File timely. Postmark or electronically submit your return no later than Tuesday, April 15. Even if you don’t owe taxes, you must file. Even if you can’t pay your taxes, you should file to avoid penalty.
— Contribute to an IRA. You have until April 15 to make your 2013 contribution. If you contribute to a traditional IRA, you can deduct this from your gross income (this is a deduction even if you don’t itemize). The 2013 limit is $5,500 and $6,500 for those who are 50 years or older.
— Get organized early to maximize deductions and avoid mistakes. Less than a month before the deadline may not be enough time, so if you have a tendency to procrastinate you may want to file an extension (Form 4868). This can give you an extra six months to get organized and file a correct return. Failure to file a tax return or a request for an extension can lead to filing penalties of as much as 5 percent per month. However, being organized and diligent with your paperwork is a sure way to get a jumpstart on your 2014 return and reduce risks for future mistakes or penalties.
— Don’t overlook small deductions. Remember to acknowledge things like charitable contributions, business, moving and medical travel expenses because these deductions can add up to substantial tax savings.
— Remember to take your own personal exemption ($3,900). If no one, such as your parents or a divorcing spouse, is claiming you on their return, you qualify for this exemption. If you don’t know, ask.
— Be aware of common tax prep mistakes. Common errors include not adding correctly, not preparing Schedule A (itemized deductions) to see if your total deductions exceed the standard deduction ($6,100 for individuals and $12,200 for married filing jointly), not keeping receipts for non-cash charitable contributions, not itemizing taxes on boats, cars, and prior year state returns and not paying attention to all details and questions to be answered on each form. Most importantly, always double-check your return regardless of who prepares it.
— File electronically and use direct deposit for any refund. This will allow your return to be processed faster and your refund received quicker.
Don’t let April 15 sneak up on you. It’s less than a month away, so get busy, get organized and get that mistake-free return completed and filed on time.