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So far this tax season, the IRS has received more than 100 million income tax returns for 2022.
That means millions of households are yet to file their returns. If you’re among them, here are some last-minute tax-filing tips to keep in mind as the Tuesday, April 18 deadline approaches.
Not everyone has to file by April 18: If you live in a federally declared disaster area, operate a business there — or have relevant tax documents filed with you by a business in that area — the IRS has likely already extended the filing and payment deadline for you. here Where you can find specific extension dates for each disaster area.
Thanks to extreme weather in recent months, for example, most California tax filers — which make up 10% to 15% of all federal filers — have already been granted an extension until Oct. 16 to file and pay, according to an IRS spokeswoman.
If you are in the armed forces and are currently or recently stationed in a combat zone, the filing and payment deadline for your 2022 taxes will likely be extended by 180 days. But your specific extended filing and payment deadlines will depend on the day you leave (or leave) the combat zone. This is an IRS publication Offers more details.
Finally, if you earned very little money last year (typically less than $12,950 for single filers and $25,900 for married couples), you don’t need to file a return. But if you think you’re eligible for a refund, for example, a refundable tax credit such as: Earned Income Tax Credit. (Use This is the IRS tool To gauge whether you need to file this year.) You’re probably eligible to use IRS Free File (for those with adjusted gross income of $73,000 or less) so it won’t cost you to file the return.
Your paycheck may not be your only source of income: If you have a full-time job, you may think that this is the only income you make and need to report. But that is not necessarily so.
Other possible sources of taxable and reportable income include:
- Interest on your savings
- Investment income (eg, dividends and capital gains)
- Get paid for part-time or seasonal work, or a side hustle
- unemployment income
- Social Security benefits or distributions from retirement accounts
- advice
- gambling win
- Income from a rental property you own
Organize your tax documents: By now you have received every tax document that third parties have to send you (your employer, bank, brokerage, etc.).
If you don’t remember receiving a hard copy of the tax form in the mail, check your email and your online accounts — a document may have been sent to you electronically.
Here are some of the tax forms you may receive:
- W-2 From your wage or salary job
- 1099-B For capital gains and damage on your investment
- 1099-DIV From your brokerage or company in which you own stock for dividends or other distributions from their investments
- 1099-INT For more than $10 in interest on your savings at a financial institution
- 1099-NEC From your clients, if you work as a contractor
- 1099-K To pay for goods and services through third-party platforms such as Venmo, CashApp or Etsy. The 1099-K This is required if you make more than $20,000 in more than 200 transactions a year. (Next year reporting threshold Comes down to $600.) But even if you don’t receive a 1099-K, you must report all income you earn through third-party platforms in 2022.
- 1099-Rs For distributions over $10 that you received for a pension, annuity, retirement account, profit-sharing plan, or insurance contract
- SSA-1099 or SSA-1042S For Social Security benefits received.
“Be aware that there is no form for some taxable income, such as income from your vacation property rental, meaning you are responsible for reporting it yourself,” according to the Illinois CPA Society.
A very last-minute way to reduce your 2022 tax bill: If you are eligible to do one Tax-deductible contributions to an IRA And didn’t do it last year, you have until April 18 to contribute $6,000 ($7,000 if you’re 50 or older). This will reduce your tax bill and boost your retirement savings.
Proofread before submitting your return: Do this whether you use tax software or work with one Professional tax preparer.
Little mistakes and oversights delay the processing (and issuance) of your return your refund (if you owe). You want to avoid things like typing in your name, date of birth, social security number or direct deposit number; selecting the wrong filing status (eg, married vs. single); make a simple math error; Or leave a required field blank.
What to do if you can’t file by April 18: If you are not able to file by next Tuesday, fill out Form 4868 Electronically or on paper and send it by April 18. You will be given an automatic six-month extension to file.
Note, however, that an extension to file is not an extension to pay. Any amount you still owe for 2022 but haven’t paid by April 18 will incur interest (currently running at 7%) and penalties.
So if you suspect you still owe taxes — maybe you had some income outside of work that wasn’t withheld or you had a big capital gain last year — estimate how much you owe and send that money to the IRS by Tuesday.
You may choose to do this by mail by attaching a check to your extension request form. Make sure your envelope is postmarked no later than April 18.
Or is there a more efficient route Pay your bills electronically On IRS.gov, says CPA Damien Martin, a tax partner at EY If you do, the IRS notes that you do not need to file a Form 4868 “The IRS will automatically process an extension at the time of filing,” the agency notes in its instructions
If you choose electronically Pay directly From your bank account, which is free, Select “Extensions”. And then given the option “Tax Year 2022”.
You can also pay by credit or debit card, But you will be charged a Processing fee. However, doing so can become much more expensive than just a fee if you charge your tax payments but don’t pay your credit card bill in full each month, as you’ll likely pay higher interest rates on the outstanding balance.
If you still owe your state income tax, remember that you’ll have to go through the same process of filing for an extension and paying it to your state’s Department of Revenue, Martin says.
Use this interactive tax assistant for basic questions you may have: The IRS provides a “Interactive Tax Assistantwhich can help you answer more than 50 basic questions related to your personal situation on income, deductions, credit and other technical questions.
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