Avoiding procrastination, understanding deductions and filing on time will make for a less stressful tax season
Its that time of year many of us tend to dread. Tax season. It can be stressful and cause some sleepless nights. However, understanding the facts and knowing where to go to obtain useful information can help mitigate those concerns.
Consider these eight tips when preparing and filing your federal income taxes:
Dont procrastinate. Avoid doing your taxes at the very last minute. When rushing to meet the filing deadline, taxpayers may overlook possible tax savings and they are also more likely to make an error. If you need a tax preparer get moving, here are some guidelines: Tips to Help you Choose a Tax Preparer
Visit IRS.gov. Keep up to date with the tax law changes and tax credits by going to IRS website and make 1040 Central your go-to source for filing tips, tax tools and news.
Use Free File. Any taxpayer who made $57,000 or less, can prepare their own return using free, brand-name tax software. You can also go to the nearest Volunteer Income Tax Assistance (VITA) and have a VITA representative complete your tax return for free. If you made more than $57,000 and youre comfortable doing your own tax return you can use the Free File Fillable Forms at www.irs.gov/freefile.
Try IRS e-file. Whether you do your own taxes or have them done for you, you should try IRS e-file. E-file is the safest, most accurate, easiest and most popular way to file a tax return and remember that if you owe taxes, you can file now and delay your payment until the April 15 filing deadline.
File on time. If you owe taxes when you file your return but you cant pay what you owe by April 15, you should still file on time and pay as much as you can. This will minimize penalties and interest charges. Failure to File penalty is 4.5 percent per month up to 22.5 percent and Failure to Pay is .05 percent per month up to 25 percent of you tax due. This is a good reason to file and pay on time. If you cannot pay the total amount of tax you owe you may request an installment agreement after you received your first notice. Most people who owe taxes are eligible for one. You can apply using the Online Payment Agreement tool on the IRS.gov website. On the Homepage click on Tools and then click on Online Payment Agreement. You can also apply using Form 9465, Installment Agreement Request, available on IRS.gov or by calling 800-TAX-FORM (800-829-3676).