It’s almost here again: Tax Day, the deadline for filing income tax returns. If you’re preparing to file taxes, consider the following steps to help you minimize stress and maximize your tax return — whether you’re planning to file with time to spare or closer to the deadline.
1. Save Time and Money by Filing Electronically
Millions of tax filers opt to file electronically by using online software, according to the Internal Revenue Service (IRS). Electronic filing programs often have better accuracy as they calculate figures automatically, says the IRS, which can save you time and alert you of deductions you may be eligible for. In addition to saving you time when filing, you may also get your tax return faster, too. If you use the direct deposit option when e-filing, you may receive your return in as little as three weeks, according to the IRS.
2. Apply for Installment Payment Agreements
Though many would prefer to receive a refund, there are ways to make the burden a little easier if you owe taxes. If you are unable to pay your entire tax bill by Tax Day, the IRS typically allows taxpayers owing under $50,000 to create an installment payment agreement using an online application or via tax form 9465. Keep in mind that, depending on the option you choose, certain fees, interest or penalties may apply.
3. File an Extension
If you cannot file your taxes by the deadline, you can file an extension by that date to possibly avoid incurring penalties and fees. An automatic six-month extension is available via tax form 4868. Remember, however, that interest or penalties may continue accruing on any taxes owed, notes the IRS. So, working on your payment plan right away may help you minimize those expenses.
4. Make Changes to Maximize Next Year’s Return
After filing your taxes, consider making some changes this year that may benefit you when tax season arrives next year. For example, if you haven’t been contributing money to an individual retirement account (IRA), consider starting one — you may be able to claim the money you contribute as a deduction on your federal taxes, according to the IRS. Or, consider making donations to charities, as the IRS may allow you to deduct contributions made to eligible organizations.
By following these tips, you may be able to minimize the stress that can come with filing taxes. Be sure to prepare early and remember to file by this year’s deadline.
The brief discussion of taxes on this page may not be complete or current. The laws and regulations are complex and subject to change. For complete details, consult your attorney or tax advisor.
By The Allstate Blog Team
https://www.allstate.com/blog/last-minute-tax-tips/
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