With April 18—the deadline for submitting your 2022 tax return—looming, you might feel the pressure to file your taxes on time.
Read below these last minute tax tips that will help you file stree-free! But don’t stress.
1. File on Time
For your taxes to be considered “on time”—so you won’t face late penalties, not to mention interest on what you owe—you must either electronically file or mail your return by midnight on April 18, 2023. That would give you an all-important timestamp (for e-filed returns) or postmark (for mailed returns) by the deadline.
If you won’t be able to file on time for any reason, be sure to file an extension.
Gail Rosen, a CPA in Martinsville, New Jersey, says to remember that an extension doesn’t extend the time to pay if you owe. If you don’t pay by April 18, you may be subject to penalties and interest on the amount you owe.
“Penalties plus interest are a very expensive interest rate on a loan. So don’t look at an extension as a way of putting off the inevitable pain of paying,” Rosen warns.
2. File for Free If You Can
The IRS estimates that 70% of U.S. taxpayers qualify to file their taxes for free with one of its many IRS Free File partners.
If you’re worried about getting zapped with an unpopular forced upgrade fee at popular online tax filing sites such as TurboTax, H&R Block and TaxSlayer, check to see if you qualify to file for free (including a free state tax return) before you start inputting your financial information.
3. Double-check Your Deductions
If you feel confident about the deductions your online tax software found for your return, that’s fantastic. But Eric Bronnenkant, head of tax at Betterment, says there are two prime opportunities for deductions that many taxpayers overlook, especially if you have some extra cash on hand:
Make an IRA Contribution
“Maxing out the traditional or Roth IRA by April 18th is a great way to save money for the long term,” says Bronnenkant, highlighting one of the most popular types of retirement savings accounts.
The IRA contribution limits for the 2022 tax year are $6,000 for individuals under age 50 and $7,000 for those who are 50 or older.
Making a contribution to a traditional IRA can reduce your tax bill. Contributions to Roth IRAs aren’t tax-deductible, but they can still help you max out the annual IRS limits for retirement savings, which will give your money more time to grow.
Max Out Your Health Savings Account
“Maxing out HSAs by April 18th is a great way to have a tax-free pool of funds in reserve for medical expenses,” Bronnenkant says. “The HSA is triple-tax-advantaged as the contributions are pretax, earnings are tax-deferred, and withdrawals for qualified medical expenses are tax-free.” They also roll over from year to year.
If you have some cash to spare, you can potentially reduce your tax liability by maxing out your HSA and increasing your deductions. The 2022 contribution limit for taxpayers covered by a high-deductible health plan is $3,650 for single individuals and $7,300 for families. Each spouse who is age 55 or older adds another $1,000 to the contribution limit.
4. Don’t Forget To Report Unemployment Benefits
Even if you already paid taxes on your unemployment benefits, you need to report those earnings on your tax return.
“Many people forget that they may have collected just one or two checks,” says Tatiana Tsoir, CPA and finance coach. “These still need to be accounted for.”
Failing to report your unemployment income can potentially cause your tax return to be rejected, as your tax return income won’t match your income that’s been reported to the IRS.
5. Check for Simple Mistakes
While today’s best online tax software can review your return for glaring mistakes, the products can’t check for typos. Here’s a list of important questions to ask to make sure your return is in tip-top shape before filing:
- Did you spell your name correctly?
- Is your Social Security number right?
- Did you enter your employer’s EIN (employer identification number) on your 1099 or W-2 correctly on your return?
- Are your calculations correct if you’re filing a paper return?
- Is your bank information (routing and account number) correct?
- Did you sign and date your return if filing by mail?
6. E-File for the Fastest Refund
If you elect to file a paper tax return, expect months of delays. Adam Wood, co-founder of Revenue Geeks, says your best bet for a speedy refund is to file electronically.
Even if you don’t expect a refund, it’s best to e-file for prompt processing of your return.
7. Mail Your Return to the Right Address
If you still want to mail your tax return, be sure you’re mailing it to the correct address. You can search for the correct address by your state and return type on the IRS website.
8. Track Your Return and Refund Online
Once you’ve filed your taxes, you can create an online account with the IRS to track your return and refund status.
The tax agency has an online guide to help you navigate your account setup. Once you’ve created an account, you can log in to see the exact status of your return and any balances. You can even sign up to receive notifications when the status of your account changes—such as when your return has been completely processed.
If you simply want to track your refund, use the IRS Where’s My Refund? tool. To track your refund, you’ll need the following:
- Social Security number or taxpayer identification number (TIN)
- Filing status
- Refund amount