The tax deadline is almost here! While it may not be the most fun financial task, it is a necessary obligation that we take on every year. And if you use great tax software, filing taxes won’t take as much time as you might fear.
But tax filing time isn’t just about filing returns. There are things you can do today to help you save money on your 2021 tax bill and save time filing.
We’ve teamed up with H&R Block to help you learn all the tips that will help you save time and money this tax season. If you are looking for an easy way to file your taxes online before the tax return deadline, check out H&R Block Online here >>
Here are the best last-minute tax tips to consider this season.
Don’t miss the tax return deadline
First, the tax filing deadline will be later than “normal”. This year, most filers face a federal tax deadline of Monday, April 18, 2022. There are a few exceptions to this rule:
May 16 is the federal filing deadline for victims of winter storms in Tennessee, Illinois, and Kentucky. It is also the deadline for victims of winter wildfires and wind in Colorado. See Irs.gov for details and if you may be affected.
Most states that levy income taxes also require the tax to be paid before April 18. However, a few states have later filing deadlines:
Massachusetts and Maine residents have until April 19, 2022.
Delaware and Iowa have a state filing deadline of April 30, 2022. Virginia has a state filing deadline of May 1, 2022.
Louisiana has a state filing deadline of May 15, 2022.
Last year, the IRS was extremely understaffed, and more than 6 million of last year’s filers still haven’t processed their returns. Despite this, the IRS encourages filers to file their 2021 tax returns as usual, even if your 2020 return has not yet been processed.
The IRS has given this crucial advice to filers still waiting for their 2020 returns: “For those waiting for their 2020 tax returns to be processed, make sure to enter $0 (zero dollars) for last year’s AGI. year on the 2021 tax return.”
Double check your return before submitting
As you clamber to the fiscal finish, don’t rush through the important details. An error on your tax form can lead to major headaches in the long run.
Every year we read stories about people who accidentally mistyped their name, address or number. While tax software can help detect obvious errors, it cannot catch some errors, such as entering the wrong bank account information.
So don’t rush! Be sure to submit the correct Social Security number and include all necessary signatures.
We also recommend reviewing different parts of your return to make sure you haven’t made a major typo. For example, one zero separates $8,000 and $80,000. If you mistype one value, you can underestimate or overstate your income, and this type of mistake can slow down the processing of your tax return.
Take advantage of the opportunities to view your figures while filing your return. Double check that they match your actual income. This is easy to do with software like H&R Block Online, which provides section summaries for earnings, deductions, and credits.
Make sure you have all your tax forms
While most people have settled into a new normal in the past year, it’s still remarkably tumultuous. You may have claimed unemployment, received advanced child tax credit payments, had sideline income, or other “atypical” forms of income. Here are a few tax forms you shouldn’t overlook this year:
Letter 6475: Your Third Economic Impact Payment. Letter 6475 from the IRS provides information about stimulus payments you may have received in 2021. People who have not received a stimulus payment, but should have, can claim a Rebate Recovery Credit. This may seem like a small group, but it could include eligible parents of newborns and adopted children, and people who qualify based on income. Letter 6419: 2021 Advanced Child Tax Credits. This IRS letter explains how much income parents received for Advanced Child Tax Credits. The remainder of the Child Rebate must be applied for via an income tax return. If you can’t find your letter, you can access it from your online account if needed.
1099-G: Unemployment income. 1099-G forms provide information about unemployment income (and whether any taxes have been withheld from the income). Although the number of jobs is currently high, many people started unemployed in 2021 and need to claim that income. If you did not receive this form, you may need to go to your state’s website to find out how to request an online copy of the letter.
1099-NEC: Non-Employee Income Reporting Forms. The 1099-NEC reports non-occupational income. Filers with this type of income are considered self-employed and may be eligible for all kinds of self-employed deductions. If you have earned more than $600 from a single business entity, it is assumed to provide you with a 1099-NEC.
File your taxes even if you owe
Also, if you owe money on your taxes, you’ll want to file your tax returns on time. Interest on late taxes is a reasonable interest, but penalties for failure to file are high and it increases the rate you pay for back taxes.
Filing your tax return will also help you determine how much money you owe so that you can create a specific plan for getting your back taxes paid off.
Find Legitimate Deductions and Credits
Great tax software makes it easy to claim legit tax deductions and credits. A great tax software, such as H&R Block Online, makes it easy to itemize deductions or claim deductions for student loans or charitable donations.
It also helps you to find credits such as:
It can also help filers reconcile confusing credits, such as:
Discount recovery credit. This credit is due to people who have not received their economic stimulus payment for 2021 or to people who have received less than they owed. Letter 6475 from the IRS explains how much money you received from the third economic stimulus payment. If you are eligible for a larger amount, you can reconcile the amount with the Rebate Recovery Credit. This can be confusing to do by hand, but tax software can help you with the heavy lifting. Child tax credit. In 2021, many parents received an Advance Child Discount. These benefits reduce the amount that parents can claim the Child Rebate this year. To reconcile the amounts, you must subtract the amount the IRS has already paid you. You will find this amount in Letter 6419 that has been issued to all people who have received advances from their Child Discount.
If you’re not sure which credits you qualify for, H&R Block can help. H&R Block Online can help you with questions about common situations you may have, and you can always upgrade to include unlimited help from their tax professionals for help! View H&R Block Online here >>
Don’t forget your costs for the self-employed
Whether you’re a full-time freelancer or a side job, you probably have some form of self-employment income. And most forms of self-employed income come with tax-deductible expenses.
Before submitting your file, search your electronic receipts to find expenses that qualify as tax-deductible. Some common deductible expenses include a portion of your Internet expenses, website maintenance costs, educational materials, and any direct cost of goods sold. You might be surprised at the sheer number of tax-deductible expenses you can find in your hustle.
By recording these costs, you can declare them in your tax return. H&R Block Self-Employed Online explains some of the legitimate deductions so you can look up these expenses on your past credit card statements and other records.
If your side business is becoming a full-time hustle, you may want to consider seeking professional help as well. H&R Block has tax experts who can help you with any situation, from filing your taxes this year to getting the help you need to succeed next year.
Claim the cost of your Flexible Spending Account (FSA)
Many employers offer Dependent Care Flexible Spending Accounts, Healthcare Flexible Spending Accounts, and other tax-deductible expense accounts. The money in your Flexible Spending Accounts is yours, but it’s up to you to claim the money. If you don’t claim the money on time, you will likely lose the money in those accounts, even if you put the money aside yourself.
If you’re lucky, you may have a few more weeks to spend the money in the account. So make contacts, get your teeth brushed, or do whatever you need to do to use up that money. Then submit your receipts so you can get your money back.
Even if you can’t continue spending, you may still be eligible to submit receipts for a refund.
Every employer has different rules regarding Flexible Spending Accounts, so check with your HR representative to find out what you need to do to take advantage of these funds.
Contribute to an IRA or Roth IRA
An Individual Retirement Account (IRA) is a tax-advantaged investment account designed for retirement. People who contribute to an IRA can claim tax deductions for contributed funds this year. The funds can grow tax-free until you withdraw them during retirement. There are income limits on IRA contributions, and the maximum you can contribute is $6,000 ($7,000 for those age 50 and older). Contributions aren’t due until tax day, so this is a great way to save on your taxes this year.
Roth IRAs are similar to traditional IRAs, but you can’t claim a tax deduction this year. Instead, you pay tax on your premium this year. Then the profits and distributions are tax-free. Even if you don’t get a tax deduction, you must complete your 2021 Roth IRA contributions by April 18, 2022.
It comes down to
As you head into the end of tax filing season, consider taking advantage of these last-minute tax tips that can save you money. The tips above can help you if you’re considering a DIY approach to filing your tax returns. However, general tips are not a substitute for help from a tax professional or tax filing agency. Professionals can help you with tax preparation and questions specific to your situation.
We recommend H&R Block Online this year. If you have not yet filed a tax return, there is still plenty of time to file your tax return. Simply sign up for H&R Block Online here and follow the prompts. Get started now >>
This post 8 last-minute tax reminders for 2022
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