So you have your W-2s and paperwork in a stack ready to go, waiting in your desk drawer. Guess what? It’s time to get those out. No more procrastinating.
First, recognize that you’re not alone: 20 to 25 percent of Americans wait until the final two weeks to file their return, according to the IRS. You are in good company.
And now, it’s time to get to work.
1. Get the goods.
Make sure you gather all forms and receipts, so you don’t have to constantly get up from your desk or arrive at a tax appointment unprepared.
Here is a checklist of vital information you may need:
- Last year’s tax return
- 1099-G for state unemployment comp or state tax refunds
- 1099-INT and 1099-DIV forms (Dividend and interest income)
- 1099-SSA for Social Security
- 1099-MISC for self-employed
- 1098-T for college tuition
- Summary of paid real estate taxes
- Summary of child care expenses
- Summary of paid health care costs
- Receipts for potential deductions
Now that you have the paperwork, grab a cup of coffee and get started.
2. Get cracking!
Your next step is registering for Internet filing service and, perhaps, calling up a tax-knowledgeable friend or parent to assist you. Take advantage of an inexpensive computer filing service like TurboTax, which will guide you step by step through the process.
You may want to check if you qualify for the free filing option, contingent upon income, that is offered by the IRS.
If you have a complex tax return – with multiple W-2s, deductions and investments — seeking the help of a professional can prevent you from making errors that will cost you money and could result in a future audit.
In some places, H&R Block is open until as late as 10 p.m. on the 15th, and you can file online with them until midnight.
3. Don’t panic. Just file an extension.
Let’s face it, not everyone will be able to complete their taxes by April 15. But there is a solution: Apply for a six-month extension by filling out IRS form 4868. This will give you extra time to finish your paperwork and make sure it is all done properly.
Note: If you owe money, you are supposed to pay by April 15 even if you file for an extension. Basically, you estimate the amount owed and finish the paperwork at a later date. If you do not have funds available, it is still important to request an extension. The failure-to-file penalty can be up to 5 percent a month, whereas the failure-to-pay penalty is 0.5 percent a month.
For those who do not owe money, the fines do not apply.
And one final word of advice: After you finish filing and let out a sigh of relief, you should return the leftover stack of paper to an envelope so that you are prepared for an audit (worst-case scenario) or simply ready to go next year.
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Alanna Ritchie is a content writer for Debt.org, where she writes about personal finance and little smart ways to spend (and save) money. Alanna has an English degree from Rollins College.