2020 has been quite the year for most people. And as if we didn’t have enough on our plates, the new tax filing date of July 15 is just around the corner. According to the IRS, 20-25% of all Americans wait until the last two weeks before the deadline to prepare their tax returns. If you fall in this category, know that you are not alone. Below are a few tips to help you get those last-minute taxes filed quickly and efficiently.
Organization is Key
Whether you keep your documents saved on your computer or stored in a shoebox, keeping everything in one place will make preparing for your income tax return so much easier. As you get your documents together, it is important to make sure you have your Social Security number as well as the Social Security number of your co-filer if you are filing jointly. Below are a couple of additional important documents to have on hand:
- Form W-2: This is the form your employer must mail you by January 31 to show your earnings and taxes withheld.
- Form 1099-INT: This is a form for interest earned. For example, this could be interest earned on a U.S. savings bond, treasury note or savings account.
- Form 1098 Mortgage Interest Statement: This form will show mortgage interest paid on your home. This includes interest on any obligation secured by real property, including a mortgage, home equity loan or line of credit.
If you feel overwhelmed, fear not. Check out this Tax Preparation Checklist for a printable list of documents to collect before preparing your taxes.
Slow and Steady Wins the Race
You may feel stressed out about getting your taxes prepared now that we’re down to the last few weeks. Remember not to rush! Rushing can lead to missing deductions, typos and math errors that can cost you money or delay your return. Take time to ensure you have no data entry errors, such as your name, Social Security number, or address. Double check that your income and expenses are properly included. This little bit of extra effort on the front end will help you catch any mistakes before filing and ultimately save you time!
File for an Extension
If you are unable to take action on or before July 15, you will be subject to IRS penalties. To avoid a failure-to-file penalty for paying late, you have the ability to file for an extension. You or your chosen tax preparer should file a Form 4868 to give you an extra six months to get your affairs in order. If you believe you owe the IRS, it is important to send an estimated payment along with your extension request to avoid the failure-to-pay penalty.
Plan for Next Year
Tax season get away from you this year? Don’t sweat it. There is always next year! Prioritize tax planning for next year by getting your tax documents ready earlier in the tax season. Remember, tax planning can be a year-round planning process. Make next spring more relaxing by getting it done ahead of time!