Every other day an e-mail comes in reminding me that I need to hurry up and file my taxes. But guess what? I took my own advice and filed my taxes in the beginning of the year. (see: 6 Reasons to File Your Taxes Early)
The rest of you now have a little more than a week to fill out those 1040 forms. For whatever the reason, nearly 28 percent of Americans wait until the very last minute to get their W-2’s in order. This sometimes leads procrastinators at financial risk because they didn't give themselves enough time to get their tax documents organized.
Now, I am not a tax expert but I am a taxpayer and a consumer… so I’m just passing along the information that has helped me over my tax filing years. Personal finance websites WalletHub and CardHub recently sent along a list of last-minute tax tips from more than 15 experts and provided a guide to avoiding tax scams during this risky time of year.
If you've taken a break from shuffling through your tax paperwork, here are several tips that WalletHub suggest which may help motivate you to get those 1040s signed, sealed and in the post by April 15.
- Don’t Try to Hide: You’re not going to slip through the cracks, and the IRS has proven far more willing to work with people when they’re straightforward about their ability, or lack thereof, to meet tax obligations. So, submit your return by the April 15 deadline even if you don’t have the money to pay and select the appropriate payment strategy for your situation.
- Watch Out For Scams: From fraudulent returns designed to steal tax refunds to phishing and illegitimate tax servicing companies, there are myriad scams to watch out for every April.
- Seek Free Advice: Having someone to bounce questions off of or even just an extra pair of eyeballs to check your work can help you avoid making mistakes and work wonders for your stress levels. Just make sure to properly vet anyone you decide to work with.
- Make an IRA and /or HSA
Contribution: IRA contributions up to $5,000 for most people and $6,000 if
you’re 50 or older are both tax-deductible and tax-deferred. Just make sure to
send the contribution by April 15 and notify the deposit institution that you
want it counted for 2014 tax purposes.
If you’re covered by a high-deductible health plan – characterized by a minimum deductible of $1,200 for individuals and $2,400 for families – you can deduct HSA contributions of up to $3,100 and $6,200 for individuals and families, respectively.
- Use Your Losses: If you itemize your deductions, don’t forget to subtract realized capital losses, gambling losses, mortgage interest, and interest incurred on business loans and lines of credit throughout the year. All are deductible to varying extents.
- Reevaluate Withholdings: Receiving a refund isn’t always a good thing. In fact, it may indicate that you are overpaying and thereby sacrificing potential investment returns.
I hope you’ve found these tax tips helpful. You can find more details on all of the tips, including commentary from tax experts, which can be found at WalletHub.com.
FYI - When in doubt, head over to IRS.gov to their FAQ section.