The tax deadline is almost here! While this may not be the most pleasant financial endeavor, it is a necessary commitment that we make every year.
The IRS recently announced that it has extended the tax day for individual taxpayers for 2021 to May 17. When we get to work on the deadline, there are a few tips that can save you money and time. Who doesn’t want to save as much as legally permitted on their tax bill?
We’re working with H&R Block to help you manage the tax season this year. If you’re looking for an easy way to file your taxes online before your tax return expires, check out H&R Block Online here >>
Here are the best last minute tax tips for this season.
Don’t miss the deadline!
While this seems obvious, many miss the tax deadline every year. It doesn’t seem like a big deal. But a missed tax deadline can cost you hundreds of dollars in penalties.
Don’t let the work of the tax return slip through the cracks. Make sure you have completed your personal registration or apply for an extension by May 17, 2021.
Otherwise, you could be forced to pay the IRS a fine in addition to your regular tax obligations. Remember, even if you extend your enrollment until October 15, 2021, you must pay all taxes due by May 17 to avoid a late payment penalty.
Contribute to your Traditional or Roth IRA
Saving for retirement is a financial priority that is often overlooked. However, if you forgot to fund your IRA by the end of the 2020 calendar year, there is still time to do your part.
You have until May 17, 2021 to make contributions to your traditional or Roth IRA from the previous year. This will allow you to put $ 6,000 in one of these accounts for retirement. It never hurts to put money in the IRA of your choice. The sooner you can save on these accounts for your retirement, the better off you will be in the future.
Discover the Best IRA Accounts if you’re not sure where to start.
Find tax-deductible expenses for your part-time job
So many of us now have sideline jobs. The opportunity to grow your income on your own terms is very attractive. However, there is another benefit to building a side business. You can take advantage of the tax-deductible costs associated with running your part-time job.
Search your electronic receipts to find expenses that are considered tax deductible. Some of these may include the portion of your internet service that is required to run your business, the cost of website maintenance, and the cost of materials for everything you need to run the side business.
You may be surprised at how much tax-deductible expenses there are in your side business. Keep a careful record of these expenses for the next year to get the full value of this tax saving opportunity.
If your sideline becomes full-time, you should also consider professional help. H&R Block has tax professionals who can help you in any situation, from filing your taxes this year to the assistance you need to set yourself up for success next year.
Use the funds in your flexible spending accounts
When you keep savings in a Flexible Spending Account (FSA), make sure you’ve used it all. Unfortunately, FSAs usually work on a “use or lose” basis for the year.
Last minute tax tips are all about taking full advantage of any tax breaks you qualify for before you lose your eligibility for them. With this, you want to take action to spend the funds remaining in your FSA account as soon as possible. If you are not sure when the deadline has passed, contact your HR department.
The recent Consolidated Funds Act, designed to alleviate the financial pressures of the pandemic, gave employers more leeway to allow workers to extend the use of these funds.
Review the options for tax credits
Tax credits can help lower your overall tax liability. However, if you don’t apply for a tax credit, you’ll miss out on these savings. Some to investigate are:
Of course, these are just a few of the tax credits you might qualify for. Take a minute to look for tax credits for your specific situation. A quick search can help you cut your tax burden significantly.
If you don’t know if you qualify for any of these credits (or others), H&R Block Online will take you through section by section, making sure you don’t miss out on anything that you are entitled to. And if you are still not sure, there are various help options available – from live chat to calls to professional support. Check out H&R Block Online here >>
Watch out for typos
When you reach the tax finish line, don’t go through the important details. A mistake in your tax form can lead to a significant headache later.
Every year we read stories about people who accidentally entered their name, address or number incorrectly. While tax software can help spot obvious errors, it cannot spot some errors like entering incorrect bank account information.
So don’t hurry. Make sure you provide the correct social security number and have all of the required signatures
File for an extension if you need more time
Filing after tax time takes the stress out of filing your taxes. However, if you need more time, you can request an extension for your submission.
Note that an extension does not delay the due date of your tax payment. Instead, you’ll need to estimate your tax liability for the year and pay the amount due by May 17th. You have to submit the application for enlargement by April 15th. A granted extension gives you until October 15th to complete your tax return.
If you cannot raise the money in time to pay your taxes, you can contact the IRS for a payment schedule. You can work with the IRS to create a payment schedule to cover your taxes within a set time frame. However, there are interest and fee fees associated with this option.
Bonus! Texas and Oklahoma residents have a later deadline
While this tip doesn’t apply to everyone, it’s important to note that residents of Texas and Oklahoma have received an extension of the tax deadline. The winter storms that created disaster areas in these states have pushed the IRS to offer an extension to those affected.
Taxpayers in these two states have until June 15, 2021 to file their 2020 taxes. Both individuals and companies can take advantage of this extension.
The bottom line
Make use of the last minute tax tips above as you proceed with your tax return. Although they will guide you, the help of a tax professional or tax filing service can help clear up any questions you have for your particular situation.
We recommend H&R Block Online this year. If you haven’t filed yet, there is still plenty of time to get your taxes done. Simply sign up for H&R Block here and follow the instructions. Get started now >>