Today is the last day to get your taxes filed to the IRS, or file a tax extension, without incurring a penalty that is. You can also receive an extra tax deduction if you open certain retirement accounts. We list out the important details you don’t want to miss, and how you can reduce your tax bill today.
In the event you might miss this deadline, we share our best tips for overcoming this.
Before tackling your taxes, here are seven last-minute tax tips you need to know before moving forward.
1. Should you DIY or hire a pro? You need to feel confident about filing your own taxes, or it might be better to hire a professional. We share the pros and cons of doing taxes on your own versus hiring an expert.
2. Use our tax checklist. We took all the guesswork out of gathering your investment documents and income statements. Here’s a complete checklist of everything you need to organize your investments and get your taxes submitted on time.
3. Lower taxes on capital gains. In all likelihood you’ll have to pay capital gains tax on any investments you sold throughout the year. If they are long-term gains, you’ll pay less taxes than if they are short-term gains. We breakdown the differences of each and how they will affect you.
4. Make your donations count. Did you donate stock to charity last year? You could be entitled a tax deduction, which can help reduce your taxable income. Make sure you get all the deductions you deserve and qualify for.
5. Two ways to minimize your tax bill. There are two methods to reducing your tax bill; tax avoidance and tax deferral. We go into more detail and explain the differences of each, so you can decipher the best strategy for your situation. Remember though, tax evasion is not a smart option!
6. File a tax extension. If you need more time to get your taxes done, you can always file a tax extension. It won’t save you from paying your tax bill but it can save you from hundreds of penalties if you don’t file your tax return on time. Just file Form 4868 and follow the instructions.
7. Contribute to a Traditional or Roth IRA. There’s still time to open an individual retirement account and gain full advantage of the deductions and credits. You can open a new account or make a contribution to a Traditional or Roth IRA anytime before the due date of your tax return, and it will still count as a contribution for the previous tax year.
You’ll want to confer with your accountant about which contributions are deductible on your return. Also note that if you file a tax extension, the deadline for IRAs is not extended. We recommend using a service like Betterment for their quick and painless process. You can also check out our best IRA promotions to maximize your contributions even more.
You deserve to get every tax deduction you qualify for, so take advantage of these tax-saving tips today.