So far this tax season, the IRS has received over 100 million tax returns for 2022.
This means that tens of millions of households have not yet filed their declaration. If yours is one of them, here are some last-minute tips to keep in mind as the Tuesday, April 18 deadline approaches.
Not everyone is required to file on April 18: If you live in a federally declared disaster area, have a business there — or have relevant tax documents stored by businesses in that area — chances are the IRS has already extended reporting deadlines and payment for you. Here This is where you can find the specific extension dates for each disaster area.
Thanks to numerous waves of extreme weather in recent months, for example, taxpayers across most of California — who make up 10-15% of all federal filers — have already been granted an extension until Oct. 16 to file. and pay. according to an IRS spokesperson.
If you are a member of the armed forces and are currently or have recently been stationed in a combat zone, the deadlines for filing and paying your 2022 taxes are most likely extended by 180 days. But your specific extended deposit and payment deadlines will depend on the day you leave (or leave) the combat zone. This IRS publication provides more details.
Finally, if you made little or no money last year (usually less than $12,950 for singles and $25,900 for married couples), you may not have to file a return. But you may still want to do so if you believe you are entitled to a refund through, for example, refundable tax credits such as the Earned income tax credit. (To use this IRS tool to assess whether you are required to file this year.) You are also likely eligible to use IRS Free File (aimed at those with an adjusted gross income of $73,000 or less), so it won’t cost you to submit a return.
Your salary may not be your only source of income: If you had a full-time job, you might think that’s the only income you earned to report. But this is not necessarily the case.
Other potentially taxable and reportable sources of income include:
- Interest on your savings
- Investment income (for example, dividends and capital gains)
- Pay for part-time or seasonal work, or a side business
- Unemployment income
- Social Security benefits or distribution from a retirement account
- gambling winnings
- Income from rental property you own
Organize your tax documents: You should now have received all of the tax documents third parties are required to send you (your employer, bank, brokerage, etc.).
If you don’t remember receiving a hard copy of a tax form in the mail, check your email and online accounts: a document may have been sent to you electronically.
Here are some of the tax forms you may have received:
- W-2 your salary or salaried employment
- 1099-B for capital gains and losses on your investments
- 1099-DIV from your brokerage or the company where you own shares for dividends or other distributions from their investments
- 1099-INT for interest over $10 on your savings at a financial institution
- 1099-NEC of your clients, if you have worked as an entrepreneur
- 1099-K for payments for goods and services through third-party platforms like Venmo, CashApp or Etsy. THE 1099-K is required if you made more than $20,000 in more than 200 transactions during the year. (Next year, the reporting threshold drops to $600.) But even if you didn’t get a 1099-K, you still need to report all income you earned on third-party platforms in 2022.
- 1099-Rs for distributions over $10 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 are no forms for certain taxable income, such as rental proceeds from your vacation property, which means 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 make a tax-deductible contribution to an IRA and you didn’t do it last year, you have until April 18 to contribute up to $6,000 ($7,000 if you’re 50 or older). This will lower your tax bill and increase your retirement savings.
Proofread your statement before submitting it: Do it whether you use tax software or work with a professional tax preparer.
Small errors and omissions delay the processing of your return (and the issuance of the your refund if we owe you one). You want to avoid things like a typo in your name, date of birth, social security number, or direct deposit number; choosing the wrong filing status (for example, married or single); make a simple mathematical mistake; or by leaving a mandatory field empty.
What to do if you can’t file your return by April 18: If you cannot file your return by next Tuesday, complete Form 4868 electronically or on paper and send it before April 18. You will benefit from an automatic extension of six months to submit your file.
Note, however, that a folder extension is not a paid extension. You will be charged interest (currently at 7%) and a penalty on any amount you still owe for 2022 but have not paid by April 18.
So if you think you still owe tax – maybe you had income outside of your job for which tax was not withheld or you had a large capital gain l last year – estimate the extra amount you owe and send that money to the IRS by Tuesday. .
You may choose to do so by mail by attaching a check to your extension request form. Make sure your envelope is postmarked no later than April 18.
Or the most efficient route is pay what you owe electronically at IRS.gov, said CPA Damien Martin, tax partner at EY. If you do this, the IRS notes that you won’t have to file Form 4868. “The IRS will automatically process an extension of the filing deadline,” the agency notes in its instructions.
You can also pay by credit or debit card, but you will be charged a Processing fee. However, it can become much more expensive than a simple fee if you charge your tax payment but don’t pay your credit card bill in full each month because you’re likely paying a high interest rate on unpaid balances.
If you still owe your state income taxes, remember that you may need to go through a similar exercise of requesting an extension and making a payment to your state’s revenue department, Martin said.
Use this interactive tax wizard to answer basic questions you might have: The IRS provides a “interactive tax assistantwhich can help you answer over 50 basic questions relating to your individual situation on income, deductions, credits and other technical questions.