tips for last-minute tax planning

Tips for Last-Minute Tax Planning

Did you just realize that tax season is here and your papers are still shoved in a drawer? You’re not alone. Most people wait until the last minute to do their taxes or file them late, but this can be a costly mistake. Late-filing penalties can mount up to a rate of 5% of the amount due with your return for each month that you’re late. If you’re more than 60 days late, the minimum penalty is $100 or 100% of the tax due with the return, whichever is less. Read on for some tips for last-minute tax planning before it’s too late!

Tips for Last-Minute Tax Planning

Gather all your documents

You’ll need a lot of information for tax season, so start collecting it now. Some documents you might keep are your mortgage statement, W-2s, 1099s, and any charitable donations. You also should collect student loan interest payment statements, health care statements, etc. Start by making a list of everything you need and checking it off when you have it.

Make a list of deductible expenses

Next, make a list of all your deductible expenses. This includes medical expenses, business expenses, and charitable contributions. This will come in handy later so you do not forget to deduct something important and miss out on a refund.

Account for life changes

Did you buy or sell a home, start school, get married or divorced, lose your job or become disabled, or have a baby? This all matters, so be sure to keep this in mind before filing.

File for an extension

If you need time to find missing documents, there’s still time to wait for them and get your taxes done. File for an extension on the IRS website now to give you more time before the April 15 deadline.

How to File Taxes

Have a tax professional file for you

Filing your taxes on your own can be time-consuming and tedious. There are a lot of programs and apps that help with the process, but it’s still not for everyone, and can sometimes take days you can’t afford. Have a tax professional file for you, and you can knock this out in less than one day. They are experts in the field and will be able to minimize your tax burden.

Find free help with tax preparation

If you make under a certain income, you can file your taxes for free. The IRS helps citizens with Free File. Click here to learn more

File on time or risk penalties and interest!

One of the most important tips for preparing your taxes is to file on time. This can be a challenge because April 15th is fast approaching, but don’t let this discourage you from getting it done! If you are not in the habit of filing your tax return by the deadline, now is the time to start. The IRS will charge late fees if you file past their deadline and they could also charge interest on any unpaid balance. These charges will add up over time and make it more difficult to pay off what you owe. To avoid these penalties, plan ahead and make sure to file by April 15th.

Palma Can Help

Need to file taxes now? Let’s talk: schedule a time here to discuss our Tax preparations and planning services