File now or file a tax extension? Here are 8 last-minute tax tips to help you decide.
Ok, so there's only a few more weeks to file your 2010 income taxes. If you happen to be a procrastinator, along with an estimated 27 percent of taxpayers are who wait till the last two weeks to file, here are some tips to help you meet the deadline...or file a tax extension.
First, some good news this year. Did you know there are three extra days to file your federal taxes? The federal tax deadline is Monday, April 18 instead of April 15. Double check with your state though, as not all state tax deadlines are the same.
Here are a few tax savings tips to think about:
- In the rush to file, don't miss out on opportunities to reduce your tax bill. Contribute to your IRA. Even procrastinators can save money on their taxes and they have until the April 18 deadline to contribute to an IRA and get a deduction on their 2010 tax return.
- Remember all those charitable contributions throughout the year. This includes cash and non-cash, household items like clothing, electronics and toys you may have donated. If you itemize, these donations can add up to tax savings. Mileage to and from charitable events, even babysitter fees while you are volunteering can be deductible too.
- Don't just take the standard deduction if you think you're running out of time. It may be worth more to itemize. Tax software programs like TurboTax can compare both and help you decide which is best for you.
- No time for an appointment. The easiest way to file on time is to go online. Taxpayers can go online to prepare and e-file taxes up to the last minute. Online tax preparation is fast, easy and convenient.
- Be sure to efile your tax returns. It's faster and more accurate. You avoid long lines at the post office and with direct deposit, you get your refund back in as little as eight days and acknowledgement from the IRS that your return has been received.
- Need more time? Don't panic. Taxpayers can get an extra six months to file (until Oct. 17, 2011) a tax extension. But remember, a tax extension is not an extension to pay your tax bill. Individuals still need to send the IRS a payment for taxes owed, within 90 percent accuracy, to avoid late penalties. To file a federal tax extension (tax form 4868 for all you tax savvy folks) for FREE, go to TurboTax.com.
- Can't pay it all now...you're not alone. Taxpayers who can't pay the full amount they owe can request an installment plan. You may qualify for a plan as long as you don't owe more than $25,000, and you must be able to pay your tax bill off within five years. There are fees to do this, but may be worth it to avoid fees and penalties.
- Plan ahead. Ok, it may feel like it's too soon to start thinking about your 2011 taxes, but things you do throughout the year, like donations, volunteering, or medical expenses may have an impact at tax time. The more you plan the better prepared you'll be come next tax day.