So far this tax season, the IRS has received more than 100 million 2022 income tax returns.
This means that tens of millions of households have not yet filed their returns. If yours is one of them, here are some last-minute tax filing tips to keep in mind as the Tuesday, April 18 deadline approaches.
Not everyone has 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—it’s likely that the IRS has already extended the filing and payment deadlines for you. Here is where you can find the specific extension dates for each disaster area.
Thanks to many rounds of extreme weather in recent months, for example, tax filers in most of California — which account for 10 percent to 15 percent of all federal filers — have already been given an extension until Oct. 16 to file and to pay, according to an IRS spokesman.
If you are in the military and are currently or have recently been stationed in a combat zone, the filing and payment deadlines for your 2022 taxes are most likely extended by 180 days. But the specific extended filing and payment deadlines will depend on the day you leave (or leave) the combat zone. This IRS publication provides more details.
Finally, if you earned little or no money last year (typically less than $12,950 for single filers and $25,900 for married couples), you may not be required to file a return. But you may want to do it anyway if you think you’re eligible for a refund thanks to, for example, refundable tax credits such as Earned income tax credit. (Use this IRS tool to assess whether you are required to file this year.) You are also likely eligible to use Free IRS File (intended for those with an adjusted gross income of $73,000 or less), so it won’t cost you to file a return.
Salary may not be the only source of income: If you’ve had a full-time job, you might think that’s the only income you’ve made and need to report. But it is not necessarily so.
Other potentially taxable and reportable sources of income include:
- Interest on your savings
- Investment income (eg dividends and capital gains)
- Get paid for part-time or seasonal work or a side hustle
- Unemployment income
- Social Security benefits or distribution from a retirement account
- Gambling winnings
- Income from a rental property you own
Organize your tax documents: By now you should have received every tax document that third parties need to send you (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 – you may have been sent an electronic document.
Here are some of the tax forms you may have received:
- W-2 from salaried or salaried jobs
- 1099-B for capital gains and loss on your investments
- 1099-DIV from your brokerage house or the company in which 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 from your clients if you worked as a contractor
- 1099-K for payments for goods and services through third-party platforms such as Venmo, CashApp or Etsy. The 1099-K 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 have to report all income you made through third-party platforms in 2022.
- 1099-Rs for distributions over $10 that you received from 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 your vacation rental, which means you are responsible for self-reporting,” according to the Illinois Society of CPAs.
A last-minute way to reduce your tax bill for 2022: If you are eligible to do a tax-deductible contribution to an IRA and you didn’t do so 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.
Check your return before sending it: Do this whether you use tax software or work with one professional tax preparer.
Small mistakes and oversights delay the processing of your return (and issuing your refund if you are owed 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 registration status (eg married vs single); making a simple math error; or leaving a mandatory field blank.
What to do if you can’t file by April 18: If you can’t file by next Tuesday, fill it out Form 4868 electronically or on paper and submit it by April 18. You will be granted an automatic six-month extension to file.
Note, however, that a file extension is not a paid extension. You will be charged interest (currently 7%) and a penalty on any amount you still owe for 2022 but haven’t paid by April 18.
So if you suspect you still owe tax—perhaps you had non-employment income that wasn’t withheld, or you had a large capital gain last year—approximate as much as you owe and send that money to the IRS by tuesday
You may choose to do this by mail by attaching a check to the extension request form. Make sure your envelope is postmarked no later than April 18th.
Or the more efficient way is pay what you owe electronically at IRS.gov, said CPA Damien Martin, tax partner at EY. If you do, the IRS notes that you won’t need to file a Form 4868. “The IRS will automatically process an extension of time to file,” the agency notes in its instructions.
You can also pay by credit or debit card, but you will be charged with a processing fee. Doing so, however, can become much more expensive than just a fee if you charge the tax but don’t pay the full credit card bill each month because you’re likely paying a high interest rate on past due balances.
If you still owe income taxes to your state, remember that you may need to go through a similar exercise of filing an extension and making a payment to your state’s revenue department, Martin said.
Use this interactive tax assistant for basic questions you may have: The IRS offers a “interactive tax assistant” that can help you answer more than 50 basic questions about your individual income situation, deductions, credits and other technical questions.