It is less than four weeks until the April 18th tax filing deadline. Here are some pro tips to help you be (tax) prepared as we approach the (tax) finish line.
1. If you have not started preparing to file, at a minimum you need to make certain you file an extension on your tax return. This does not give you more time to pay if you owe – you’ll accrue late interest – but nowhere near the 5%/month penalty for failing to file a return. File an extension, which gives you until October 16th to file.
2. If you want to contribute to an IRA/Roth IRA/HSA/ESA, you have until April 18th to do so. That said, if you need to open an account to make that contribution, you need to do that now. Institutions typically do not guarantee the ability to open accounts or deposit before the deadline after April 1st due to the deluge of client requests they receive in April.
3. If you plan to work with a tax preparer, contact them TODAY. Good preparers are close to filling up if they aren’t full already, so you’ll either be spending hours in line or using someone that is subpar to file your taxes. Secure your tax professional today.
4. Do you have all your documents gathered? If not, make that your top priority this week/weekend. Most financial institutions will let you download documents from your account page. Commonly forgotten items include the 1098 mortgage form, real estate taxes if they aren’t listed on the 1098, 1098-T if you pay tuition to a higher education institution, and ID documents such as Driver’s License and Social Security card where appropriate.
5. Children are an easy prompt for several potential credits, but credits that tend to get overlooked include education expenses for adults (the Lifetime Learning Credit may apply even if you went to college previously), energy credits for upgrades to the home, and homestead property tax credits at the state level depending on where you live.