Last minute tax tips for 2016

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This is it, there are just few more days to file taxes before the official deadline, and if you still haven’t done it, here are my five cents based on my experience this year:

  • Take your time when preparing your tax returns – even tax software like TurboTax or H&R Block need your commitment – I prepared taxes on my own this year using TurboTax and I had to invest several hours to get through it. I have to admit that my tax return wasn’t the simplest one (I report different types of income, home mortgage, student loans, etc) and I went back and forth with some options. For example, I tried standard vs. itemized deduction to see which one offered the biggest tax benefit. This takes time and you shouldn’t assume you’d get your taxes done before your coffee gets cold. This is possible if your tax situation is relatively simple (perhaps you received just one or two W2s), but even then you should take your time to ensure that all information you entered is correct.
  • Apply for extension to file taxes or not (Form 4868) – every case is different but the first thing to consider would be whether or not you owe taxes and how much – it is important because on one hand, if the extension is granted you would be responsible to pay interest on the amount you owe to Uncle Sam. On the other hand, this may still be a better option given you can dedicate additional time to review your return and ensure you maximized your deductions and credits. Only you can determine the cost benefit of haste in filing the returns.
  • The extension would give you until October 17, 2016 to file taxes, but if you anticipate that you will owe money this year, one way to reduce interest on the balance you owe is to make a payment when you file for extension.
  • If you file before the deadline (Monday, April 18) and owe taxes but don’t have the funds to make a payment, the IRS offers different options. One of them is the installment payment allowing you for a monthly payment of your liability.

It’s never too late to have someone help you with your taxes; If your total household income was less than $62,000 in 2015, you qualify to file tax returns for free. For additional help, click on free tax filing information and enter your zip code to locate local volunteers who will aid you in this process.

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