So far this tax season, the IRS has received more than 100 million income tax returns for 2022.
That means tens of millions of households have yet to submit their returns. If yours is among them, here are some last-minute tax filing tips to keep in mind as the Tuesday, April 18 deadline approaches.
Those online tools can be especially helpful now if you’re scrambling to get back in before midnight. Or, if you realize you need to file for an extension. Either way, here are some important things to know:
Thanks to several rounds of severe weather in recent months, for example, most California tax filers — who account for 10% to 15% of all federal filers — have been given a extension until Oct. 16 to file and pay, according to an IRS spokeswoman.
If you are in the armed forces and are currently or have recently been stationed in a combat zone, the filing and payment deadlines 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 left (or left) the combat zone. This IRS publication offers more detail.
Finally, if you made very little last year (usually less than $12,950 for single filers and $25,900 for married couples), you don’t have to file a return. But you may want to if you think you qualify for a refund thanks to, for example, refundable tax credits such as the Earned Income Tax Credit. (Use this IRS tool to check if you’re required to file this year.) You may also be eligible to use IRS Free File (intended for those with an adjusted gross income of $73,000 or less ) so that it doesn’t cost you to submit a return.
Your salary may not be your only source of income: If you have a full-time job you may think that is the only income you make and need to report. But it’s not like that at all.
Other potentially taxable and reportable sources of income include:
- Interest on your savings
- Investment income (for example, dividends and capital gains)
- Get paid for part-time or seasonal work, or a side hustle
- Unemployment income
- Social Security benefits or distributions from a retirement account
- Gambling winnings
- Income from rental property you own
Organize your tax documents: By now, you have received every tax document that third parties need 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 your online accounts – a document may have been sent to you electronically.
Here are some of the tax forms you may have received:
- W-2 from your salary or salaried job
- 1099-B for capital gains and losses on your investments
- 1099-DIV from your brokerage or company in which you own stock for dividends or other distributions from their investments
- 1099-INT for interest on more than $10 in your savings at a financial institution
- 1099-NEC from your clients, if you work as a contractor
- 1099-K for paying for goods and services through third-party platforms such as Venmo, CashApp or Etsy. A 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 don’t get a 1099-K you must report all the income you make on third-party platforms in 2022.
- 1099-Rs for distributions in excess of $10 that you receive 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 renting out your vacation property, meaning you are responsible for reporting it yourself,” according to the Illinois CPA Society.
A last-minute way to reduce your 2022 tax bill: If you’re eligible to make a tax-deductible contribution to an IRA and haven’t done so in the past year, you have until April 18 to contribute up to $6,000 ($7,000 if you’re 50 or older). That will lower your tax bill and increase your retirement savings.
Proofread your return before submitting it: Do this if you use tax software or work with a professional tax preparer.
Small mistakes and oversights delay the processing of your return (and the issuance of your refund if you owe it). You want to avoid things like having a typo in your name, date of birth, Social Security number or direct deposit number; choosing 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 can’t file on time, fill out Form 4868 electronically or on paper and mail it no later than today. You will be given an automatic six-month extension to file.
Remember, however, that a filing extension is not a fee extension. You will be charged interest (currently running at 7%) and a penalty on any amount you owe for 2022 but haven’t paid by April 18.
So if you suspect you still owe taxes — maybe you had income outside of your job that wasn’t tax withheld or had a big capital gain last year — estimate how much you still owe and send that money to IRS by the end of today.
You may choose to do this by mail, attaching a check to your extension request form. Make sure your envelope is postmarked by April 18.
Or the more efficient route is to pay your debt electronically at IRS.gov, said CPA Damien Martin, a tax partner at EY. If you do that, the IRS says you don’t need to file a Form 4868. “The IRS will automatically process an extension of time to file,” the agency says in the instructions. this.
If you choose to pay electronically from your bank account, which is free, select “extension” and then “tax year 2022” when given the option.
You can also pay by credit or debit card, but you will be charged a processing fee. Doing so, however, can be more expensive than a bill if you pay your tax bill but don’t pay off your credit card bill in full each month, because you’ll likely pay a higher rate. of interest on outstanding balances.
If you still owe income taxes to your state, remember that you’ll need to go through the same exercise of filing for an extension and paying your state’s department of revenue, Martin said.
Use this interactive tax assistant for basic questions you may have: The IRS provides an “interactive tax assistant” that can help you answer more than 50 basic questions related to your individual income status, deductions, credits and other technical questions.