14 Last-Minute Tax Tips: Don't Leave Money on the Table

by Salary.com Staff - Original publish date: January 18, 2012

For a lot of us, filing taxes is only slightly more fun than having a fender bender, and not quite as exciting as a major dental procedure. No wonder we put off wrestling with the 1040 form.

But even at this late date, there's plenty of help out there to get your tax return filed correctly, and on time--whether you have a professional prepare it or do it yourself.

1. Don't rush

"Do not compromise the tax return by rushing to get it completed," says Mark Steber, chief tax officer at Jackson Hewitt Tax Service, based in Parsippany, N. J. "A lot of people do this -- and they leave money on the table, because they don't take all the deductions they're entitled to."

2. Go paperless

File electronically, with the IRS "e-file" program. It's faster than paper filing, and can get you your refund faster, too. And e-filing is safer: "You don't have to worry about the stamp falling off," Steber says. "There are fewer hands touching the return, entering data, potentially getting numbers wrong."

3. Take stock of your life

Did you get married last year? Have a child? Adopt one? Lose a spouse to death or divorce? Move for a new job? Go back to school? Improve your home? Retire? Take on responsibility for elderly parents? Have your grown children boomeranged back home? Any of these life changes can trigger tax breaks for you.

4. Check out what's new in the tax code

While you've been living your life, Washington has been tweaking the tax code. This year more than ever, it's worth it to do a little research to see what benefits you can claim. New benefits have been added and old ones expanded. In some cases, eligibility has changed.

5. Do some online research

All manner of IRS information is available online. In just a few minutes at your computer, you can get a good idea, for instance, whether any of these programs apply to you: the American Opportunity Credit, the Making Work Pay Tax Credit, the Earned Income Tax Credit, or Lifetime Learning Credit.

6. Don't overlook potential deductions

Everybody heard about last year's "cash for clunkers" program. But did you know that if you purchased any new car in 2009, you may be able to claim the sales tax you paid as an income-tax deduction -- even if you do not itemize? There's even a break for those who bought new cars last year in states with no sales tax.

7. Don't forget property taxes

The government is making a number of big deductions available even for those who don't itemize. Property taxes, up to $1,000, are another example of this. It's an important break, especially for seniors who no longer have a mortgage.

8. Check out the new tax benefits for education

Tax breaks for education expenses have been expanded, to cover not just tuition and fees, but technology purchases, too – computers and educational software. What’s more, these breaks are available to taxpayers, their spouses, and their dependents.

9. It's not too late to get professional help

What if you start to think you need a pro to do your taxes? Are you worried that it's too late? Don't be.

The first few months of the year are to the legions of tax-prep professionals what Christmas is to the retail sector. Yes, they're busy. But they're staffed up, and they're ready to help you.

10. Call ahead if you can

It's still smart to call ahead to make sure that the tax firm you'd like to use has the expertise you need -- at the office you plan to visit. Setting up an appointment is a good idea, too.

11. Don't be embarrassed about your shoebox

Mark Steber of Jackson Hewitt says, "It's an urban myth that tax preparers don't like to see shoeboxes -- or manila envelopes." Don't be embarrassed about the form your records take. Any written records are good. And any research you've done or questions you've gathered will be of interest to a pro helping you out.

12. Late filers, don’t forget Form 4868

If you know you really have no time to do justice to your 1040, the IRS makes it easy to file for an extension, using Form 4868. It’s virtually automatic.

13. But watch out

Here's the kicker: The extra time the IRS so cheerfully grants you is time to file your return. It's not more time to pay your taxes. If you or your tax pro calculates your taxes after April 15 and you owe money, you'll need to pay interest and possibly penalties.

14. Cover yourself to avoid a penalty

The IRS asks you to calculate your tax liability for the year when you file for an extension. You may think, if I already knew my tax liability, I wouldn’t be filing for an extension; I’d be filing my 1040 and be done with it!

But still, an extension can give you a little breathing room to do your return right. You can highball your estimated liability and send in a payment with your 4868, and get that money back as a refund when you do file your return.

Victory can be yours

The tax pros may be the only ones who really celebrate April 15. But there's still time, and there are still resources, to help you come to terms with your 1040, and declare victory.

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