Last-Minute Tax Tips2 min read • March 28, 2019
At the beginning of tax season, you may be eager to stay organized. Armed with a checklist of paperwork, you collect everything needed well in advance. But life happens, and before you know it, the tax deadline is approaching.
If this sounds familiar, you are far from alone. Last year, 14 million taxpayers waited until the deadline to file. Procrastination isn’t the biggest mistake you could make. But you’re a lot more likely to make costly mistakes. Follow these last-minute tips to avoid trouble.
Be clear on the deadline
Before doing anything, make sure you know the deadline. This is especially important for last-minute filers without a lot of wiggle room. For most of us, the deadline is Monday, April 15, 2019. Do whatever it takes to remember — jot it down, set weekly reminders, or post it above your desk.
Start by getting organized
Get organized before diving into tax software. It will save you from stopping for missing information. The best way to avoid this is by keeping a checklist. Your list may include (but aren’t limited to):
- Personal information
- Social Security numbers
- 1095-A – proof of health insurance
- last year’s tax return
- banking details for direct deposit
- Income forms
- 1099-G – unemployment income
- 1099-R – retirement plan distributions
- SSA-1099 – Social Security income
- Income adjustments
- 1098-E – student loan interest
- 1098-T – tuition paid
- records of IRA contributions
- records of health savings account (HSA) contributions
- records of self-employed health insurance
- records of alimony paid
- Deductions (if you choose to itemize)
- cost of child care
- cost of education
- cost of adoption
- 1098 – mortgage interest
- records of charitable donations
- receipts from medical and dental expenses
- losses from theft or damage to your home
- Taxes paid
- federal, state, local taxes
- property taxes
- receipt for vehicle registration fees
Keep last year’s return handy
There are a few reasons to keep last year’s return within reach. First, it may serve as a reminder for exactly which forms you need. It may also offer an estimate of what to expect for this year’s final bill. If you are using the same software or working with the same tax professional, it should be easy to have it at your fingertips.
Run tax projections: standard vs. itemized deductions
Thanks to the Tax Cut and Jobs Act (TCJA),
more folks will take the standard deduction — nearly 90 percent of taxpayers, according to the Tax Foundation. That’s
because the standard deduction is now twice as high: $12,000 if you are singles
and $24,000 for married filers.
Either way, it’s a good idea to run projections to see which option is better for your family. You can use Free File if your income is below $66,000. Most tax software will show you which option is best.
Triple check your return for mistakes
You may be eager to submit your return — especially if you are up against the deadline. But a sloppy return littered with mistakes will only create future problems. It’s worth it to double and triple check details like your Social Security number, filing status, signature, and date. You can see a list of the most common blunders here.
It’s never too soon to plan for 2019
With this year’s filing behind you, it’s easy to ignore planning for next year. But this may be a mistake. The fresh sting of your last minute scramble may be enough motivation to stay organized. Invest some time into creating a system you can actually stick with. By the time next year rolls around, you will be one step ahead — making it easier to file early.
Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.