April 17, 2023 - 10:07 am
You’re not alone if you wait until the last minute to file your federal tax return. Some people delay filing because they want to avoid the process, especially if they know they’ll owe money.
You can’t ignore the tax-filing deadline, though, because you’ll face civil or criminal penalties if you don’t file a return. Here are the last-minute tax tips and deadlines you need to file on time — and your options if you can’t.
1. Know the Tax Deadline
The deadline to file your 2022 personal income tax return is April 18, 2023. Although it’s normally April 15, since that day falls on a Saturday — and that Monday is Emancipation Day in Washington, D.C. — you have until the following Tuesday to file your taxes.
2. Have All the Necessary Documents
During the first few months of the year, you’ll probably receive several tax-related documents. These can include:
- A W-2 form from your employer
- 1099 forms from other sources of income, such as interest or dividends, or contract or freelance work
- A 1098 form showing mortgage interest paid off by at least $600 if you’re a homeowner
- Form 1098-E showing student loan interest paid off by at least $600 if you have federal student loans
- 1095 forms showing health insurance coverage
- Receipts for charitable contributions
- Child and dependent care records
Gather these documents together before you sit down to start your return.
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3. Know Which Health Coverage Form You Need
Three versions of Form 1095 exist: A, B and C. Form 1095-A will be sent to you if you get your health insurance through the Health Insurance Marketplace. You will need information from this form to file your tax return, but don’t include the form with your return. You will receive Form 1095-B if you are covered by minimum essential coverage, and if you are covered by a plan sponsored by an applicable large employer (ALE), you will get 1095-C. You don’t need to wait for 1095-B or 1095-C to file your return.
4. File Electronically
Filing your return electronically, known as e-filing, is the easiest, fastest and most reliable method. You can file taxes online for free with IRS Free File if your adjusted gross income is $73,000 or less. If your income is higher, you can still use Free File fillable forms and file on your own. Alternatively, there are a number of reasonably priced tax preparation software programs or services you can use. You can also use a paid tax preparer who is authorized to e-file, although if you’ve waited until the last minute to file, you might have trouble finding one who can fit you into their schedule.
Many software programs will let you file your federal return for free but charge you to file your state return. Read the fine print before you make your choice.
5. Import Your Data
You can import your data into most tax software programs, saving you time and reducing errors. If your employer or financial institution makes this option available, you enter some basic information and the program retrieves the details of your W-2 or 1099 form. Depending on the software you use, other options might include taking a picture of your W-2 with your phone and uploading it, uploading a PDF of last year’s return or letting software you used last year populate this year’s forms with last year’s information.
6. Reference Last Year’s Return
If you’re not using the same software program you used last year or are filling by paper, use the last return you filed as a benchmark for this year’s return. If your tax situation hasn’t changed much, you should have a good idea of what your income will be, the deductions you can claim and which forms you need to file.
7. Consider Making an IRA Contribution
You can make a deductible individual retirement account contribution right up until the filing deadline, so you can contribute for 2022 until the last day to file taxes on April 18, 2023. When you contribute to a traditional IRA, you can deduct the amount of your contribution from your income, which means you’ll pay tax on a smaller amount.
You can contribute up to $6,000 for the 2022 tax year, plus an additional $1,000 “catch-up” contribution if you are age 50 or older. You can deduct your contribution if you meet certain requirements, like not having a retirement plan at work.
8. Beware of Careless Errors
Double-check your return and have someone trusted review it, too. Because you’ve waited until the last minute to prepare your return, you’re more likely to make mistakes.
Be especially careful when entering numbers, including Social Security numbers. Tax software will alert you of math errors, but it won’t detect whether you’ve entered numbers incorrectly, said Barbara Weltman, president and founder of the financial company Big Ideas for Small Business.
9. Take Breaks
Even if you’re down to the wire, don’t try to complete your return in one sitting, particularly if it’s complicated. Stepping away from your return occasionally will help you come back with a fresh set of eyes and, hopefully, avoid making mistakes.
10. Know the Steps To Take If You Can’t Complete Your Return on Time
If you can’t meet the April 18 deadline to file your federal return, you can request an automatic tax extension from the IRS with a Form 4868, Weltman said. You can access the form and file it electronically through the Free File link on IRS.gov. Although you can only file your return with Free File software if your income falls below a certain level, anyone can file for an extension for free using one of the software programs.
11. Pay What You Owe, Even If You File an Extension
An extension will give you more time to file your return and help you avoid a late-filing penalty, but you’ll still have to pay what you owe by the April 18 filing deadline to avoid late-payment penalties and interest, Weltman said.
12. File Even If You Can’t Pay Your Tax Bill
“Don’t let your inability to pay prevent you from filing on time,” Weltman said. Avoiding filing your return because you can’t make a tax paymentwill only make matters worse. There are penalties for filing taxes late.
If you owe but can’t pay, you can limit the damage by filing your return on time. The failure-to-file penalty is 5% of the tax owed each month your return is late, up to a maximum of 25%. If you file but do not pay, you will be charged just a 0.5% penalty on what you owe each month until you’ve paid it off.
If you can’t pay your entire tax bill, pay as much as possible. You can reduce additional interest and penalties if you pay as much as you can with your tax return, according to the IRS.
13. Know What To Do If You Owe But Can’t Pay
If you can’t pay what you owe by the tax deadline, you might be able to arrange an IRS installment plan, especially if you’ve always filed and paid on time in the past.
If you’ve filed your return and owe less than $50,000 in tax, penalties and interest, you can apply for the IRS Online Payment Agreement, which allows you to avoid the hassle of calling the IRS or visiting a field office to apply. You also can apply online as a short-term option if you owe less than $100,000 in combined tax, penalties and interest. The IRS will let you know immediately whether your application has been approved, Weltman said.
14. Start Planning Now for Next Year
Don’t make skipping the tax return deadline a habit.
“This process should be a lesson going forward,” Weltman said.
Keep tax-related documents organized throughout the year and collect tax forms in a folder as they come in during tax season so you don’t have to scramble to meet the tax-filing deadline. And make sure you have the funds available to pay your tax bill by opening a separate savings account for taxes and setting money aside each month. That way, you’ll have the money you need when tax season comes.
15. File Any Delinquent Returns Now
If you have delinquent tax returns that you should have filed in past years but didn’t, you should get ahead of those now as well. If you skipped a year or two, it will catch up with you down the road, so get your house in order now.
If you have a legitimate reason why you didn’t file a return in a previous year, you might be able to avoid some penalties. Avoid making poor excuses for not filing, because the IRS has probably heard them all. Your best strategy might be to fall on your sword, admit your wrongdoing and correct the mistake by filing now.
Get on top of your taxes as soon as you can, because they won’t go away. Following these last-minute tax tips for late filers will help make tax filing easier and help you get a jump on next year.
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