Even though the April 17 deadline is just days away, make sure the return you file is accurate because mistakes can mean smaller refunds and bigger tax bills. Mistakes can also delay your refund or increase chances of an audit or correspondence from the IRS.
Following are H&R Block’s three tips last-minute filers need to keep in mind.
1. Avoid common IRS audit triggers
The following can result in even the most straightforward return being subjected to an IRS tax audit – so avoid them:
- Incorrectly claiming the Earned Income Tax Credit
- Claiming business deductions that are not qualified
- Making math errors, which the IRS considers to be any wrong number on a return
- Picking the wrong filing status
- Submitting hand-written returns.
2. Double-check frequently missed tax breaks, consider itemizing deductions
Among the most frequently missed tax breaks are for higher education. This includes the American Opportunity Credit (worth up to $2,500), Lifetime Learning Credit (worth up to $2,000) and the Tuition and Fees Deduction (can reduce taxable income by up to $4,000 and is now available to those who do not have a high school diploma or GED).
Taxpayers who have not itemized their deductions in the past could find doing so has a better result than claiming the standard deduction, particularly if they purchased a home. Those who live in an area hit by a disaster may be eligible to claim casualty losses for damaged property not covered by insurance, which could be another reason to itemize deductions. Other itemized deductions that could reduce taxable income include unreimbursed work-related travel expenses, medical expenses and charitable donations.
3. File a return or extension by April 17
Not filing a tax return or extension by the deadline can be a costly decision; there is a 5-percent monthly penalty for not filing a return, whereas the monthly penalty for not paying in full is 0.5 percent.
Taxpayers who need more time to prepare an accurate tax return can file a free extension at participating H&R Block offices, making their filing deadline Oct. 15. However, filing for an extension does not extend the time to pay taxes due; to avoid penalties and interest, taxpayers must pay the balance due by April 17.
Need some help to make the deadline? Participating H&R Block tax offices will have extended hours as the deadline nears. Options for DIY tax prep include the free H&R Block At Home™ 1040EZ app on the iPhone and Android smartphones to file form 1040EZ and a state form completely free through April 17. All H&R Block tax preparation options come with accuracy guarantees.
[Image: Pete Lambert via Flickr]