April is upon us, and thoughts are turning to some of the symbols connected with the month. For example, the Easter Bunny, daffodils, short sleeves and rain showers. Oh, and there’s one more thing…I can’t put my finger on it. Oh, yeah…TAXES!
In a few short weeks, the federal government is going to want your paperwork, regardless if you’re ready or not. This means trouble for those who normally wait till the last minute to close it all up. Then again, there are advantages to waiting until the last day to file your taxes. In other words, the pendulum swings both ways. Here are some of the last minute tax preparations you and your young family need to do before the 15th.
Maximize IRA contributions. Did you open up a Roth IRA by December 31 of last year? Well, then you still have time to maximize the contributions to it before the filing deadline. See, the tax rules for Roth IRAs are not as stringent as they are for other retirement accounts, which means folks have the option to maximize the amount of money in their accounts before the 15th. Why do this? Does the word ‘deduction’ mean anything to you.
Review all charitable contributions. Don’t neglect the receipts you received from Goodwill or the Salvation Army after you donated items to them. These are a gold mine of deductions that may reduce the mount you need to pay to the federal government or increase the refund you receive. And don’t just take a look at thrift stores. Examine receipts from religious organizations and other charitable locations to see if they qualify. Make sure the receipt comes from a tax-deductible non-profit. Some organizations are non-profit but fall under a different tax category that may not be deductible.
Check on all W2s and 1099s. You thought you received all of your tax records by the first week of February and have recorded them in your documents. Don’t file yet. Take a second look and make sure everything is in, because there’s a chance you may be missing a W2 or 1099 due to an address change or the document being lost in the mail. Should this be the case, immediately contact the organization in order to receive a copy of the tax form.
File an extension or set up a payment plan. You completed your tax paperwork at the end of January and discovered that you owe money. A lot of money. More money than you have available at the moment. Time to talk to representatives at the local IRS office to determine your next move. You may need to set up a payment plan or request an extension in order to find the cash to make the payment. You may even want to take your paperwork to H&R Block or other professional tax organization in order for them to review the information to see if it’s correct.