Next Tuesday marks the deadline to file taxes for individuals who filed for extension. In order to minimize the cost of taxation, taxpayers who filed for extension, and especially those who didn’t, should do the following:
- File tax returns
- Pay as much as feasible, if owing anything
Filing by the deadline allows doing it electronically; after October 15th that feature is gone. There are some benefits to electronic filing one of which is the access to free commercial software. All the leading tax preparation companies, such as TurboTax or H&R Block, offer free filing versions of their product. Whether or not you qualify for it depends on your income and complexity of your return. IRS FreeFile has a list of all available products.
Additional benefit of filing electronically is a quick confirmation of your tax return being submitted and accepted. And in case you qualify for a refund, a direct deposit can be very easily arranged. It is the fastest way to get the refund, which on average takes 21 days.
To minimize the financial burden of taxes, it is recommended that the taxpayers who owe the government start making payments as soon as possible. Even a small payment can make a difference and shows a good will to pay taxes that can help in setting up alternative payment arrangements. Filing and not making any payments after the deadline can increase the amount owed by interest and penalties.
The benefit of filing online
Using the commercial software to file taxes provides one important benefit. You do not need to purchase it until you’re ready to file. You can choose any product you like – starting with the IRS FreeFile – and complete the return. It is possible that your tax situation is more complicated that the one covered by a free version. In that case, the software informs about the need to upgrade to account for that complexity.
Commercial software provides quick insight into whether or not you owe anything. Every piece of information you enter impacts the amount of your refund or how much you owe and is displayed in real time.
In the end, your only initial investment is time and with the weekend ahead of us, the timing couldn’t be better.
Before making a purchase, check for any promo codes to make filing even little less expensive.