9 last-minute tax tips to keep in mind
You’re not alone if you’ve waited until the last minute to file your taxes. It’s a tedious process, especially if you have a complicated tax situation. On top of that, it’s not fun if you know you owe money to the IRS. Unfortunately, you can’t ignore the tax-filing deadline—unless you want to subject yourself to penalties. But don’t stress! The following tips will help make filing your 2022 tax return a breeze:
1. File on time
For your taxes to be considered filed on time, you must file or mail your return by midnight on April 18, 2023. This is different from the usual deadline of April 15th, giving you three extra days.
If you fail to submit your tax return by the deadline, the IRS will issue a Failure to File Penalty. That penalty is calculated based on how late you file your return and the amount of unpaid tax as of the original payment due date. The Failure to File Penalty is 5% of the unpaid taxes for each month (or part of a month) that a tax return is late. The penalty will not exceed 25% of your unpaid taxes.
There is usually no penalty if the IRS owes you a refund, or if you don’t owe taxes altogether. But, it’s still good practice to file on time—you have just three years to claim a tax refund.
2. Take breaks
Even if you’re working down to the wire, don’t try to complete your return in one sitting. Get up and take breaks periodically to avoid making any critical mistakes. Stepping away from your return for a few minutes will let you come back with a fresh set of eyes—and hopefully allow you to catch any errors, which brings us to our next point…
3. Check for mistakes
Check for mistakes before you submit your tax return, even if you’re using online tax software. Tax software can usually catch glaring mistakes, but you need to proof for small typos. Be sure to look over the following:
- Your name
- Your Social Security number
- Your employer’s EIN (employer identification number)
- Any calculations if you’re filing a paper return
- Your bank information (account and routing number)
- Whether you signed and dated your return (if filing by mail)
4. File electronically
Filing electronically, also known as e-filing, is the easiest, fastest, and most reliable method of filing your tax return. E-filing will also allow you to receive your refund faster. You can file your taxes for free with IRS Free File if your adjusted gross income is $73,000 or less. If you don’t qualify for Free File, you can still use the Free File Fillable Forms.
5. Send your return to the right address
Despite many e-filing options available, there are still people who prefer to mail their tax returns instead. If you’re one of them, check that you’re mailing your return to the correct address. You can look up the correct address based on your state and return type on the IRS’s website.
6. File an extension (if needed)
If your tax situation is complicated and you won’t be able to file your return on time, consider filing an extension. You can request an automatic extension from the IRS with Form 4868. You can access the form through Free File on the IRS website, even if you make more than the maximum threshold for Free File.
If you file an extension, you should still pay what you owe by April 18th. Filing an extension will give you more time to submit your return and avoid a late-filing penalty, but not paying what you owe by the deadline will result in late-payment penalties and interest.
7. Know what to do if you can’t pay
If you owe the IRS but can’t afford to pay in full, you may be able to pay in installments by applying for the IRS Online Payment Agreement. If you owe $50,000 or less in combined tax, penalties, or interest and have filed your return, you can apply for a long-term repayment plan. You can apply for a short-term repayment plan (180 days or less) if you owe less than $100,000 in combined tax, penalties, and interest.
8. Track your return and refund online
- Your Social Security or taxpayer ID number
- Your filing status
- The exact refund amount on your return
9. Start planning for next year
Let this be a lesson learned—preparing your tax return takes time. Keep tax-related documents and forms organized throughout the year so you don’t have to scramble at the last minute. If you suspect that you’ll owe money, start setting funds aside in a savings account each month. That way, you’ll have the funds needed when the next tax reason rolls around.