Actions to Take 30 Days Before the Tax Deadline

Actions to Take 30 Days Before the Tax Deadline

With March upon us, the tax deadline is coming up fast. However, there are still things to be done as you prepare for the April 15th tax deadline. With 30 days until the deadline, here are some last minute tasks to add to your to-do list as Tax Day approaches. 

Getting in Last Minute Retirement Contributions 

One last minute way to boost your tax refund is by maxing out your IRA contributions. While most retirement account contributions are made by the end of the year, taxpayers can actually make additional contributions all the way until April 15, 2020. The basic limit for 401(k) contributions for the 2019 tax year is $19,000, with the exception of those who are at least age 50 who then get an additional $6,000. When contributing to all traditional and Roth IRAs, those 49 and younger cannot exceed $6,000 and those 50 and older cannot exceed $7,000. 

Amend Your Tax Return 

Sometimes, no matter how meticulous you are, you still might end up making a mistaking your tax returns. That’s where amends come in. There are a number of reasons why someone might need to amend their taxes. For example, it’s possible that your employer made a mistake on your W-2 and had to send you a corrected document or you forgot to claim income from a one-time side gig. One of the most common reasons people make amends to their taxes is because they’ve received a notice from the IRS saying they did not accurately submit information from their 1095-A, Health Care Statement when filing. If you need to make an amend to your tax return, don’t worry, it happens more often than you might think. Simply file Form 1040X, Amended Tax Return, along with the corrected information, or the additional documents you forgot to file with your return.

Filing Your Taxes

It may seem obvious, but if you still haven’t filed your taxes, with 45 days until the deadline, you should make this a priority. One of the best ways to prepare is to start gathering necessary documents. This includes dependent information such as their social security numbers or necessary childcare records and your own personal information including your spouse’s full name and social security number. Gather sources of income such as W-2 forms or 1099s, rental income, retirement income such as through an IRA, savings or dividends such as a health savings account, and forms itemizing other income such as gambling income or trusts. You’ll also want to gather forms and paperwork related to the deductions you may be qualified for such as owning a home, charitable donations, medical expenses, childcare expenses, and educational expenses to name a few. Even if you are hiring a professional tax preparer, gathering all forms ahead of time will help ensure your filing is completed by the deadline. 

Filing an Extension 

If you’re struggling to get everything done and ready to file by the April 15th deadline, you may want to consider filing for an extension. The process is straightforward and requires you to simply fill out IRS Form 4868 before the regular tax deadline. Once the IRS receives and accepts the extension request, you will have until October 6th to file your taxes. However, it’s important to note that the extension simply gives you more time to file, it does not give you more time to pay. Therefore, any balance that you might owe the IRS will still be due by the April 15th deadline. 

Start Prepping for the 2020 Tax Year 

When it comes to taxes, it’s never too early to start prepping for the next year. Not only does this include being more organized about recording your expenses or getting in contact with your employer about adjusting your withholdings, it also includes being smart about your refund. When you receive your refund, it might be your first instinct to finally buy that new gadget or product you’ve had your eye on. However, you might want to consider other options such as saving or investing your return so that you see greater gains. 

COVID19 Tax Update

COVID19 Tax Update

While this is usually Turbo Tax’s busiest week of the season, they may have noticed a decrease in submitted taxes this week. This is due to the fact that the Treasury and IRS, have extended the tax deadline by 90 days in response to the novel coronavirus. The new federal tax filing deadline for this year is now July 15th. While the extension may come as a reprieve for many, taxpayers who are ready to file and make their tax payment without straining their bank account are encouraged to file in order to get their refund as soon as possible. Well, here are some answers to some common questions you might have.  

Do I need to file an extension in order to take advantage of the new filing deadline? 

No, you do not have to file any extensions or take any action. The new filing deadline of July 15th automatically applies to all taxpayers. 

Is there also an extension of the tax payment deadline? 

Yes, the new tax payment deadline is also July 15th. You do not need to take any action for this either. This deferment of tax payments is interest fee and penalty free, simply pay by July 15th. 

Does this mean I have more time to contribute to my IRA? 

Yes, a bonus to the extended due date of taxes is also that you now have until July 15th to contribute to your IRA for 2019. 

Will this affect when I get my refund?

No, the Treasury Department will continue processing refunds as soon as your taxes are filed. You should receive your refund within the normal time frame (9 out of 10 refunds are received within 21 days when filed electronically). 

What do I do if I already filed my taxes and scheduled my payment for the April 15th deadline? 

If you’ve already filed and scheduled your payment, but want to take advantage of the new deadline, you’ll have to cancel your payment and reschedule it. In order for this to go into effect, changes to the payment needs to be made no later than 11:59 p.m. ET, two business days before the scheduled payment date. 

What if I need more time then the July 15th deadline to file or pay my taxes? 

If you need additional time to file, you will then need to request an extension using Form 4868. This extension will give you until October 15th to file your taxes. However, tax payments need to be made by July 15th. Payments that are made after the July 15th deadline are subject to interest and penalties. 

Does the deadline also apply to state taxes?

A majority of states in the country have also extended their due date to the federal July 15th tax deadline. However, some states have created different deadlines and guidelines. It’s important to determine what your state has decided so that you do not unintentionally accrue any penalties.