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So far, this tax season, the IRS has received income tax returns of over 100 million people in 2022.
That means tens of millions of households have not yet filed returns. If you're among them, here are some last minute tax tips to keep in mind as the deadline for Tuesday, April 18th approaches.
No one needs to submit it on April 18th. If you live in a federal declared disaster area, or have business there, or have tax documents stored by businesses in that area, the IRS may already have extended the deadline for applications and payments for you. Here you can find a specific extension date for each disaster area.
According to an IRS spokesperson, for example, thanks to many extreme weather in recent months, most tax returners in California account for 10% to 15% of all federal applicants – have already been granted extensions for file and payments.
If you are in the military and are currently stationed in the combat zone or recently, the deadline for tax applications and payments for 2022 is likely to be extended to 180 days. However, your specific extended submission and payment deadlines depend on the date you leave (or leave) your combat zone. This IRS publication provides more detailed details.
Finally, if you make little or no money last year (usually under $12,950 for a single filer and under $25,900 for a married couple), you may not need to file a return. However, if you think you qualify for a refund thanks to a refundable tax credit, such as an earned income tax credit, you may want to do so anyway. (Use this IRS tool to measure whether you need to file this year.) You are also likely eligible to use IRS-free files (for people with adjusted gross incomes of less than $73,000), so there is no cost to submit a return.
Your salary may not be your only source of income: if you had one full-time job, you may think it was the only income you did and you must report it. But that's not necessarily the case.
Other taxable sources of reportable income are:
Interest on part-time or seasonal work payments or distributions from retirement accounts from retirement accounts (such as dividends and capital gains)
Organizing tax documents: Now you need to receive all tax documents that say you need to send a third party (e.g., an employer, bank, brokerage, etc.).
If you don't remember receiving a hard copy of your tax form via email, check your email and online account. The document may have been sent electronically.
Here are some of the tax forms you may have received:
W-2 from Wages or Salary to your investment capital gains and losses from 1099-B broker or company, shares or other distributions from 1099-DIV dividends or other investments from 1099-DIV, or other distributions from 1099-INT for interest of more than $10 at financial institution 1099-NEC. 1099-K is required if you make more than $20,000 in more than 200 transactions a year. (The reporting threshold will drop to $600 next year.) However, even if you are not acquiring a 1099-K, you will still need to report all income you made via 1099-Rs in 2022 for pensions, pensions, retirement accounts, profit sharing plans, or distributions of over $10 received for SSA-SA-SHARING benefits.
According to the Illinois CPA Association, “note that there is no form for taxable income, which means you are responsible for reporting yourself,” according to the Illinois CPA Association.
One very last way to cut down on the 2022 tax bill: if you are eligible to make a tax-deductible contribution to your IRA and not do so last year, you will need to donate up to $6,000 ($7,000 for those over 50) until April 18th. This will cut tax bills and increase retirement savings.
Please proofread the return before submitting it. Do this whether you use tax software or work with a professional tax returner.
Small mistakes and monitoring delay the processing of returns (and issue a refund if the issuance of a refund is being paid). You want to avoid having a typo in your name, your date of birth, Social Security number, or direct deposit number. Select the wrong filing status (e.g., married vs. single); create a simple math error. Alternatively, leave the required fields blank.
If you cannot file by April 18th: If you cannot file by the next Tuesday, we will submit it by April 18th, either electronically or on paper on Form 4868.
However, please note that extensions to files are not extensions to pay. You will be charged interest (currently running at 7%) on amounts that have not been paid in 2022 but have not been paid by April 18th.
So, if you suspect you are still borrowing taxes, you probably had some income outside of the job where taxes weren't allowed to withhold, or you had a huge capital gain last year – by Tuesday, you'll roughly estimate how much you'll borrow and send that money to the IRS.
You can choose to select this in the mail and attach a check to the extension request form. Please make sure the envelope has been collected by April 18th.
Or, a more efficient route would be to pay what you borrow electronically on IRS.Gov, said CPA Damien Martin, EY's tax partner. If you do that, the IRS points out that you do not need to file Form 4868. “The IRS will automatically handle extensions of file times,” the agency points out at the instructions.
If you choose to pay directly electronically from a free bank account, select “Expand” when given the option and select “Tax 2022”.
You can also pay by credit or debit card, but you will be charged the processing fee. However, if you charge tax payments, you should not pay your credit card bills entirely each month, as they are likely to pay a high interest rate on your outstanding balance, although they will be much more expensive than just a fee.
If you are still owing income taxes to the state, remember that you may need to make similar filing acts for extensions and pay the state's revenue department, Martin said.
For basic questions you may have, use this interactive tax assistant. The IRS offers “interactive tax assistants” that help you answer over 50 basic questions related to your individual situation regarding income, deductions, credits and other technical questions.