Congratulations, you’ve made it to April after this long winter.
It also means the clock is ticking even louder to file your taxes. It can be expensive to do so and as a procrastinator, you may be panicking. But don’t worry; there is still time to file your taxes last minute and inexpensively.
Here are five last-minute tax filing tips
Get Organized and Look at IRS Rules
The first step is to get all your tax documents organized. Maybe they’re already sitting in a pile but now it is the time to double-check that you have everything.
If you’re missing a form, request it ASAP.
As a homeowner, the documents may include a property tax bill, points paid for refinancing, a first-time home buyer tax credit payment, and capital gains. You may also want to gather your bank statements, bills, manufacturer certification statements and income forms such as a W2, W4 or W9.
Now that you’re organized, get familiar with the tax filing rules.
As an individual, if your gross income was not greater than $10,000, the IRS doesn’t require you to file taxes, but you may do so if you believe you’re getting a return. If you are 65 years and older, individuals have an $11,500 cut-off income for individuals and for married couples filing jointly $20,000.
File Online or Through an App
Now that you’re organized, to ensure your tax filing will make it to the IRS by April 15, your best option may be to either file online or via a mobile app.
During worry, the IRS approves of taxpayers filing electronically. It’s a win-win situation: They can file faster and you’ll receive your refund sooner.
There’s an array of online software to file your taxes including Free File, TaxAct, and TurboTax. They are either free or come at a small cost as they include different versions to address a taxpayer’s multiple needs.
According to GoBanking Rates, free TurboTax editions works well for either a student or a first-time filer while a deluxe version ($49.99) can guide you on more than 350 deductions and credits such as homeowner tax deductions. A $74.99 premier version works well for investors selling bonds, mutual funds or stocks while the $99.99 option is useful for home and business needs.
As for mobile apps, TurboTax’s SnapTax enables you to file taxes from either your cell phone or your tablet; IRS2Go offers to monitor your filing status, and iDonatedIt will assist you with tracking non-cash charitable donations made during the year, enabling you to track them in a single place.
Organizations with Free Support
Maybe you’re more comfortable getting help one-on-one. There are numerous national organizations out there available offering free assistance such as AARP’s Foundation’s Tax-Aide and the IRS’ VITA and TCE programs.
As the biggest U.S. free tax assistance program, Tax-Aide has been helping taxpayers for 46 years with its large tax expert volunteer staff. Available nationwide, they help 2 million taxpayers annually. It is still available through April 15, and it helps a lot of senior citizens.
Also, for seniors and lower-income families, the IRS has two programs: the Volunteer Income Tax Assistance (VITA) program (for those with an annual income of $52,000 or less) and Tax Counseling for the Elderly (TCE).
VITA has IRS-certified volunteers with sites nationwide in public areas including libraries, schools, community centers and shopping malls. They can assist with simple income and electronic filings as well as discuss potential tax credits.
TCE provides free services to everyone, with a particular emphasis on helping seniors with pension and other retirement questions.
Filing an Extension
Occasionally filing an extension may be your best option as it offers you six additional months (October 15) to file your taxes. You can do this by filing IRS Form 4868 electronically–usually without a charge.
Keep in mind this postponement doesn’t offer you an extension for paying taxes. There could be potential penalties and to avoid these; you will need a minimum of 90% paid on your IRS tax debt. Currently, interest sits at 3% annually (compounded daily), and it will be tagged on your pending payment.
If you file an extension, you’ll need to do one for Federal and State taxes.
You Can’t Pay, or You Don’t File
Regardless of your situation, you need to take action by April 15. If you don’t file a tax form, and you owe money, you’ll get hit with penalties for the late filing.
If you can’t pay, keep in mind that 3% interest will add up quickly with a late-payment penalty starting on April 16 at 0.5% monthly (along with interest).
One option for the balance owed is an IRS online payment agreement, which may work if you have unpaid taxes of $50,000 or less. You can file at IRS.gov, allowing you to schedule your payments.
What happens if you don’t even file a tax return? There’s usually a 5% monthly penalty, which maxes out at 25%.
Keep in mind, the later you do anything, the greater you’ll pay from penalties and interest.
And if you file more than 60 days after your return’s due date, you’ll be hit with a minimum $135 penalty or 100% of unpaid taxes—whichever is less.