Last Minute Tax Filing Tips | Business CNN

NY
cnn
—

So far this tax season, the IRS has received more than 100 million income tax returns for 2022.

That means tens of millions of households still have to file their returns. If yours is among them, here are some last-minute tax filing tips to keep in mind as the Tuesday, April 18 deadline approaches.

Not everyone has to apply on April 18: If you live in a federally declared disaster area, have a business there, or have relevant tax documents stored by businesses in that area, the IRS has likely already extended filing and payment deadlines for you. This is where you can find the specific extension dates for each disaster area.

Thanks to many rounds of extreme weather in recent months, for example, taxpayers in most of California, which represents 10% to 15% of all federal taxpayers, have already been granted an extension until October 16 to submit and pay. according to an IRS spokesperson.

If you are in the military and are currently or were recently stationed in a combat zone, the deadlines for filing and paying your 2022 taxes will most likely be extended by 180 days. But your specific extended filing and payment deadlines will depend on the day you leave (or leave) the combat zone. This IRS publication provides more details.

Finally, if you earned little or no money last year (typically less than $12,950 for single filers and $25,900 for married couples), you may not need to file a return. But you might want to do it anyway if you think you're eligible for a refund thanks, for example, to refundable tax credits like the Earned Income Tax Credit. (Use this IRS tool to evaluate whether you should file this year.) You're also likely eligible to use IRS Free File (intended for people with adjusted gross incomes of $73,000 or less), so it won't cost you to file a return.

Your paycheck may not be your only source of income: If you had a full-time job, you may think that's the only income you earned that you should report. But that is not necessarily so.

Other potentially taxable and reportable sources of income include:

Organize your tax documents: By now you should have received all the tax documents that third parties must send you (your employer, bank, brokerage, etc.).

If you don't remember receiving a paper copy of a tax form in the mail, check your email and online accounts; A document may have been sent to you electronically.

Here are some of the tax forms you may have received:

“Please note that there is no form for some taxable income, such as rental income from your vacation property, meaning you are responsible for reporting it yourself,” according to the Illinois Society of CPAs.

A last-minute way to reduce your 2022 tax bill: If you're eligible to make a tax-deductible contribution to an IRA and haven't done so in the past year, you have until April 18 to contribute up to $6,000 ($7,000 if you're age 50 or older). That will reduce your tax bill and increase your retirement savings.

Review your return before submitting it: Do this whether you are using tax software or working with a professional tax preparer.

Small mistakes and oversights delay the processing of your return (and the issuance of your refund if you're owed one). You want to avoid things like typos in your name, date of birth, Social Security number, or direct deposit number; choosing the wrong marital status (for example, married or single); make a simple mathematical mistake; or leave a required field blank.

What to do if you can't apply by April 18: If you are unable to apply by next Tuesday, complete Form 4868 electronically or on paper and submit it by April 18. You will be granted an automatic six-month extension to apply.

Please note, however, that an extension to file is not an extension to pay. You will be charged interest (currently 7%) and a penalty on any amounts you still owe for 2022 but have not paid by April 18.

So if you suspect you still owe taxes (maybe you had some income outside of your job for which no taxes were withheld or you had a big capital gain last year), figure out how much more you owe and send that money to the IRS by Tuesday . .

You may choose to do this by mail by attaching a check to your extension request form. Make sure your envelope is postmarked by April 18.

Or the most efficient route is to pay what you owe electronically on IRS.gov, said CPA Damien Martin, tax partner at EY. If you do that, the IRS notes that you will not have to file a Form 4868. “The IRS will automatically process an extension of time to file,” the agency notes in its instructions.

If you choose to pay electronically directly from your bank account, which is free, select “extension” and then “tax year 2022” when presented with the option.

You can also pay with a credit or debit card, but you will be charged a processing fee. However, doing so can be much more expensive than just a fee if you collect your tax payment but don't pay off your credit card bill in full each month, since you'll likely pay a high interest rate on any outstanding balances.

If you still owe income taxes to your state, remember that you may need to go through a similar exercise of filing for an extension and making a payment to your state's department of revenue, Martin said.

Use this interactive tax wizard for basic questions you may have: The IRS provides an “interactive tax assistant” that can help you answer more than 50 basic questions related to your individual circumstances about income, deductions, credits and other technical questions.