With the tax deadline just a week away, the pressure is on for procrastinators who still haven’t filed their taxes.
If you’re one of those people waiting until the last minute, financial professional Kevin Klug from Secure Retirement Solutions is here with a few tips.
-The tax deadline is later than usual this year - Why is that and what’s the actual deadline?
April 15th has been ingrained in our brains as “tax day”. But this year, it falls on a Saturday. Monday, April 17th is also a holiday, Emancipation Day in Washington, which pushes the deadline to Tuesday, April 18th.
-What is the #1 thing procrastinators should focus on when they're putting their taxes together?
Get it right – two of the most common mistakes on tax returns are listing an incorrect Social Security number or doing your math wrong.
These mistakes are completely avoidable, but sometimes in the last-minute rush, people overlook them.
Make sure to double check, because these errors can cost you money in your tax refund or flag you for an audit.
-What is the deadline to ask for an extension?
A lot of people think that filing an extension is a bad thing - but it is not necessarily ‘frowned upon’ by the IRS. In fact, they prefer that people ask for an extension so they can get it right the first time.
If you can’t get all of your paperwork together by the deadline, an extension will give you an extra 6 months to file.
Remember if you owe money on your taxes, make your best estimate because you still need to pay by April 18th. Then, make sure you get your return filed by October 16th.
-Is there a fee for filing an extension?
Basically, there are two penalties the IRS charges fees for: a late filing fee and a late payment fee.
You can avoid a late filing fee by applying for an extension by 11:59 pm on April 18th. I have a link to that form on my website, srsplans.com
Don’t forget, you can still get hit with a late payment fee if you owe money on your taxes.
Whether you file an extension or not, that money is due by 11:59 pm on April 18th.
-What are the downfalls of waiting to file?
If you are expecting a refund, you’ll have to wait longer to get your money.
The longer you wait to file, the longer it takes the IRS to process your return.
You can get your money quicker by e-filing and using direct deposit. Direct deposit is also a safer way to get your money because your check isn’t sitting in your mailbox.
Once you’ve filed, you can track your refund through the IRS - I’ve put a link to that on my website as well.
-Where do you go to file online?
You can use freefile on the IRS website if you file a qualifying return. Or you can e-file with one of several different tax filing companies.
Depending on your annual salary, some of these sites will allow you to file your state and federal taxes for free, but most people will have to pay some sort of fee.
-What’s new on this year’s form?
Affordable Care Act tax penalties have increased for people who do not have qualified health care coverage. There are some exemptions to this rule so make sure you discuss with a tax professional.
The standard deduction is going up $50 to $9,300 for heads of household.
There are changes to the tax laws every year - at this point, if you have a complex return, I recommend you file for an extension and sit down with a tax professional to make sure you get it right.