Last-Minute Tax Moves Before Deadline
As tax season wraps up, reviewing deductions, expenses and retirement contributions can help keep more money in your pocket this year.
WASHINGTON — There is less than a month left to file your taxes before the deadline. For those who still haven't filed their returns, here are some tips for filing.
What are the best last-minute tax tips before I file?
Make sure you've gathered all the forms you'll need, from W2s and 1099s for employment to more easily forgotten items. You'll also need forms for any interest paid on mortgages or student loans, any dividends from stocks and interest from bank accounts.
You'll also need to check to see if your state is in full compliance with new federal tax laws. If not, you will need to make adjustments to your state returns to account for federal deductions that are not available on the state level. Using electronic filing software can help with this process, or you can work with a tax professional to ensure you are complying with both state and federal laws.
How can I reduce my tax bill at the last minute?
Some methods to reduce your tax bill, such as making charitable contributions, have to be completed before the end of the tax year, making it too late to take advantage of this year.
But you can still max out your contributions to tax-deductible retirement accounts or health savings accounts, as long as you do so by the tax deadline.
If you've made money off a side hustle, you may also want to take a second look and make sure you've accounted for any business expenses, such as supplies or mileage, that can be deducted.
What should I do if I'm running out of time to file my taxes?
You can file an extension on your taxes, but there's a catch. The extension only applies to filing; if you expect to owe money, it still has to be paid by the original deadline. You'll need to estimate what you owe and pay by the deadline to avoid or reduce penalties.
The extension form also has to be filed by the regular tax deadline.
What tax strategies can save me money?
Only a qualified tax preparer can tell you exactly what to do to reduce your specific taxes. But it's generally good to review all possible deductions and make sure you're taking advantage of any that apply. You should also make sure to compare itemizing deductions to the standard deduction to determine which one will save you the most money.
How can I reduce my overall tax bill this year?
Most ways to adjust your tax bill for the year, such as making charitable deductions or adjusting your withholding, have already passed. You can make last-minute contributions to tax-deductible retirement accounts or health savings accounts.
Although you may not be able to reduce this year's bill, it's a good time to make any adjustments to save on next year's taxes before you forget.
What deductions or credits do most people miss?
Taking the standard deduction is simple, but it may benefit you to itemize to take advantage of deductions that many people overlook.
Charitable contributions may be overlooked; be aware that the organization must be an eligible charity, and you will need receipts. If you volunteer instead of writing a check, you may be able to deduct mileage and gas costs.
If you've got student loans, the interest can be deducted in most circumstances. That's true even if your parents are the ones paying off the loan, as long as they no longer claim you as a dependent.
Most people know that certain retirement contributions are tax-deductible, but those under certain income thresholds may qualify for an additional credit.
Did you lose big on your Super Bowl bet? You may be able to deduct that, and other gambling losses, from your taxes if you itemize.
While the child tax credit only applies to children up to age 17, there are certain circumstances in which adults can qualify as dependents and earn a tax credit.
You can also deduct jury pay if you served on a jury but were required to surrender your pay by your employer.
Parents may also be missing some important deductions when it comes to childcare. In addition to day care costs, summer camp tuition, preschool tuition and babysitting, payments to certain relatives can all qualify for a deduction.
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