Are you telling me you still haven’t filed your tax return? What are you waiting for? An article on last-minute filing tips? Sorry I kept you waiting. Here are a few things to consider now that there are just hours left till the deadline:
- For a faster return submission, e-file. TurboTax offers a free federal e-filing plus e-filing of your state for an additional charge. For me, avoiding that post office line is well worth it. You should also know, a refund will follow a paper return in about six to eight weeks after filing, while the e-filed return will have your refund to you in about three weeks.
- If you are getting a refund, you can ask the IRS to direct deposit your refund to your checking or savings account. You are permitted to designate up to three separate accounts if you wish, but as the IRS warns, your bank may not accept a joint refund into your single accounts, so check with your bank first.
- Owe money and can’t pay? Still, file your return. There are penalties for failure to file which are in addition to the late payment penalty and interest. There are two choices for delayed payments: the brief additional time to pay, an extra 60 to 120 days to pay in full, or the installment plan. For the installment plan you use Form 9465 and can choose to pay for up to 60 months. This should be a last resort, but the IRS interest rate is better than most credit cards will charge, and may be the right option.
- Wondering just how much interest the IRS will charge you if you are late or choose an installment plan? Easy. News Releases and Fact Sheets is the place to look. Enter “interest” in the search field and choose “title.” I quickly uncovered the latest release which told me the rate for Q2, 2011 is 4%.
- Just can’t cope with that pile of paper? File an extension with TurboTax for free. We’ll walk you how to form file Form 4868 the “Application for Automatic Extension of Time To File U.S. Individual Income Tax Return.” To be clear, this will just extend the time to file your return and help you avoid the potential penalty for not filing, it’s not an extension of the time to pay your taxes. So while you’re still finding letters thanking you for your large charitable donations, be sure that you’ve at least paid enough to avoid a penalty, then file the extension.
- One last thing many taxpayers can easily miss, the Make Work Pay tax credit. This credit can get you up to $400 (or $800 if married filing joint) depending on your income level. If you’re doing your taxes by hand, it’s pretty easy to overlook. This credit was only available for 2009 and 2010, so don’t miss out.
I hope these tips helped you through the final hours before calling the tax year a wrap.