The air will start cooling down soon indicating fall, and another important tax day is quickly approaching! If you filed for a tax extension on May 17, you have until the October 15 tax extension deadline to file your taxes. I know there has been a lot going on this year and you may have needed the additional time, but don’t worry TurboTax is here for you. Here are eight last-minute tax tips to help you easily and accurately file your taxes by the final tax deadline.
- Gather your documents in one place. When you sit down to file your taxes, make sure you have all the necessary documents like W-2s, 1099s, receipts for expenses, mortgage interest, and your kids’ social security numbers in front of you.
- Go online and e-file. Even though it’s the last-minute crunch, you don’t need to stress. TurboTax makes it easy to e-file your taxes online from the comfort of your home. With TurboTax, you have the luxury of filing your taxes seamlessly across devices, anytime and anywhere you want. You can conveniently jump-start your taxes by snapping a photo of your W-2 with your phone or tablet, and watch as your information is securely put into the correct tax forms eliminating data entry. You can start on your phone, take a break, and finish your taxes on your computer. By going online to prepare your taxes, you can save time and money, avoiding the necessity to go out anywhere. You can also connect live via one-way video, online and from your mobile device, to a TurboTax Live tax expert with an average 12 years experience, to get you through the final 2020 tax deadline.
- E-file with direct deposit. If you are expecting a tax refund, e-file with direct deposit is the fastest way to get your tax refund. The IRS expects to issue nine out of 10 tax refunds within 21 days or less of acceptance when you e-file with direct deposit, compared to what normally takes six to eight weeks for paper-filed tax returns, but can take longer now.
- Double-check important information. According to the IRS, one of the top mistakes taxpayers make when rushing to meet the tax deadline is gathering incorrect Social Security numbers for their children and spouses. Make sure you have the correct Social Security numbers when you prepare your taxes. Correct Social Security numbers are required to get valuable tax deductions and credits.
- Be Aware of Tax Benefits for Dependents. Dependents can be worth valuable tax deductions and credits. Even though TurboTax helps you so that you don’t miss out on tax benefits you’re eligible for, you should gather your receipts related to your dependents like receipts for daycare and even summer camp since you may be able to claim the Child and Dependent Care Credit. Don’t forget, you may also be eligible for the Earned Income Tax Credit worth up to $6,660 in 2020 with three or more kids and the Child Tax Credit. There is also a credit for supporting non-child dependents like your parents or grandparents called the Other Dependent Credit which is worth $500.
- Don’t forget what you did last year. Although more taxpayers will take the standard deduction (TurboTax estimates and the IRS confirmed about 90%) versus itemized deductions under tax reform, including a few additional receipts for itemized deductions may push you over the standard deduction, lowering your tax liability.
- Remember to include charitable contributions made throughout the year. TurboTax ItsDeductible will help you track and accurately value your donations year-round and then you can import them into your TurboTax tax return. For tax year 2020, you can deduct up to $300 per tax return of qualified cash contributions if you take the standard deduction.
- File even if you owe. If you filed a tax extension and e-file your taxes by the October 15 tax deadline, you will avoid a failure-to-file penalty of 5% per month of the unpaid tax liability. Even if you owe money, you can ask the IRS for an installment agreement when you file your taxes. The installment agreement will allow you to pay your tax debt over six years.
TurboTax Live Tax Experts Are Here for You. TurboTax asks simple questions about you and gives you the tax deductions and credits you’re eligible for based on your answers, but if you still have questions you can connect live via one-way video to a TurboTax Live tax expert with an average 12 years experience to get your tax questions answered. TurboTax Live tax experts are available in English and Spanish and can review, sign, and file your tax return or you can even fully hand your taxes over to them. All from the comfort of your home.
*There have been so many natural disasters this year. If you were a victim of a federally declared natural disaster, the IRS offers relief in many cases, whether in the form of extensions to pay or file your taxes. The IRS recently announced further extended tax deadlines for victims of Hurricane Ida. Check the IRS disaster website for more information.