Tips for Preparing Your Tax Return Close to the Deadline

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If you’re working on your tax return this weekend, you’re in good company. Only 61.325% of personal tax returns have been filed as of March 28, 2014, according to the latest update from the IRS. That means 38.675% of us are still working on our tax returns.

Here are some tips for working on your tax return in the days just before the April 15th deadline.

  • Prepare your tax return, just enough to figure out if you owe and how much.
  • Start working with tax preparation software, there’s even free software available if you qualify.
  • File an extension. Before you file an extension you’ll need to use your draft tax return to find out if and how much you may owe. Don’t rush it, though. Preparing a tax return that you’ll feel confident about takes time.
  • Pay any tax due by 4/15. Payment can be sent in with your extension.
  • Then continuing working on your return with a calm head.
  • Scheduling time with a tax accountant will be easier after the April 15th Deadline.

Supplemental Information and Overview:

An extension gives you an additional six months to file your tax return, but doesn’t provide additional time to pay any tax due. So, you should at least figure out whether you owe and, if so, how much. That way you can make arrangements to pay by 4/15, and then finish up your tax return at a more leisurely pace.

Now that you’ve filed an extension, let’s break the tax preparation process into two parts: what must be done by 4/15 and

what can be done after 4/15.

Are there any actions that a person can take by April 15th to reduce the amount of tax? Yes. Depending on what makes sense for your situation:

  • Contribute savings to a traditional IRA and/or Roth IRA. Implication: figure out if you’ll be able to deduct traditional IRA contributions or not; figure out if you’re eligible to fund a Roth IRA or not; figure out if either of these makes sense for your situation.
  • Contribute savings to a health savings account. Implication: figure out how much you can contribute and if this strategy makes sense for your situation.
  • Donate to a charity providing relief to people impacted by Typhoon Haiyan. Donations made by 4/14 can be deducted on your 2013 return under a newly passed law.

Are there any actions that can wait until after 4/15 and before 10/15?

  • Contributing savings to a SEP IRA or solo 401(k) if you’re self-employed.
  • Reviewing and finalizing your tax return.

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