Everyone dreads the end-of-year tax season, but there are ways to make it less painful. We’ve compiled some top tips for you here that could help you save money, find lost deductions, and ease your stress.
1. File On-Time
To avoid paying late filing penalties, you’ll need to file your return electronically or mail it by midnight of the due date. If you won’t be able to file your taxes on time, file for an extension.
2. File for Free, if Possible
About 70% of American taxpayers can file their taxes for free at one of the IRS’s Free File partners. If you’re worried about being charged a forced upgrade fee to file your taxes online, see if you qualify for a free state return before you start entering your financial information.
3. Double-Check Your Deductions
Feeling confident about the deductions your tax software found? Wonderful! But there are two opportunities for tax deductions — IRA deductions and HSA deductions — that many taxpayers overlook.
You can reduce your taxes by depositing money into a traditional IRA. Additionally, Roth IRAs are not tax deductible but still let you take advantage of the annual IRS limits for retirement savings.
If you have dollars to spare, maximize your HSA contributions and claim as many deductions as possible.
4. Make Sure to Claim Unemployment Benefits.
It’s easy to overlook the checks you’ve received, especially if you’ve received only one or two. However, these still need to be accounted for.
If you didn’t report your unemployment income on your tax return, it could be rejected because the information on your return won’t match what the IRS has on file.
5. Be Sure to Check for Simple Mistakes.
If you use online tax prep software, it can flag apparent errors. But it can’t catch typos. Here are some questions to ask before filing your return to make sure it’s in top shape:
– Is your name spelled correctly? – Have you entered the correct Social Security number? – Did you correctly enter your employer’s EIN on your 1099 or W2? – If you’re filing a paper return, are your calculations correct? – Is your bank information correct? – If filing by mail, did you sign and date your return?
6. E-File for Fast Refunds
While you might like the satisfaction of stamping your tax return, it could delay your refund. If you want your rebate quick, it’s best to file electronically. Even if you don’t expect a refund, e-filing will get your return processed faster than mailing a paper copy.
7. Make Sure You Mail Your Return to The Correct Address
If you still want to mail your tax return, check the IRS website for the correct mailing address by return type.
8. Track the Status of Your Refund or Return Online
Once you submit your tax return, you can track its progress online by creating an account with the IRS.
