If you haven't filed your tax return yet, don't sweat it! Get 7 last-minute tips to file your income tax return and meet the deadline so you stay out of trouble with the IRS. http://j.mp/MoneyBooks
Money Girl
214 MG Tax Boot Camp: Session 3
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Hi friends, you're listening to the Money Girl Podcast. I'm Laura Adams, the author of Money Girl's Smart Moves to Grow Rich. This is the third and final session in our tax bootcamp series. Because Uncle Sam wants you, but he also wants your money. Let's review the training you recruits have already gotten from Sergeant Adams. That's me. In the first session of tax bootcamp, you learned how to fight for a lower tax bill using tax deductions and credits. In the second session, I told you how to successfully navigate a landmine known as a tax audit. Now, it's time to conquer the enemy. You come this far so don't turn soft on me now. If you're ready to finally get your tax return done, this episode is for you. Okay, here are seven last minute tips for filing your tax return. Tax filing tip number one, don't procrastinate. If you haven't already filed your taxes, you might think this tip is a little too late. But just because you didn't get your taxes done early doesn't mean that you have to take it down to the wire. Though you have three extra days to file your taxes this year, there's nothing more stressful than putting it off until the very last minute. Your tax return must be filed electronically or postmarked no later than midnight on April 18. Be sure to give yourself plenty of time because rushing to meet the deadline only increases the chance that you'll forget something important and make a costly mistake. Tax filing tip number two, gather all the right paperwork. Whether you do your taxes yourself or hire an accountant, you have to round up all your data and tax forms. It's also helpful to have last year's tax return handy so you or your tax pro can verify how certain amounts of income or losses were treated. If you have dependence or filed jointly with a spouse, you'll also need to have everyone's social security numbers at your fingertips. Here's a list of the various documents that you may need to collect, W-2 forms for wages from employers, various 1099 forms for income from different sources like non-employee compensation, investments, bank interest, dividends, unemployment benefits, real estate sales, retirement distributions, health savings account distributions, royalties, prizes, and debt cancellation. You also need records of other income that may not be reported on a 1099 form like jury duty pay, gambling proceeds, and rental income. Remember that most income is taxable even if you didn't receive a tax form for it. When in doubt, referred IRS publication 525, taxable and non-taxable income. Tax filing tip number three, gather expense records. In addition to receiving tax forms for your income, you should also receive tax forms for certain types of expenses. You need to gather those forms in any receipts or records that can support tax deductions and credits that you may be eligible for. Here are a few records that you may need, 1098 forms for expenses like student loan interest, mortgage interest, mortgage insurance premiums, and loan points, 5498 forms for contributions you made to an IRA or a health savings account. You also need receipts for tax credits that you might qualify for if you made energy efficient improvements to your home, purchase to home, bought a hybrid vehicle, or had education expenses, for instance. And of course, receipts for tax deductions like medical expenses, charitable donations, state taxes, work related expenses, tuition and fees and moving expenses. In tax bootcamp session number two, we discussed how tax deductions that are unusually large for your amount of income can be a red flag for the IRS. So if you don't have receipts to support your tax related expenses, be sure to keep a copy of your bank or credit card statements for documentation. Tax filing tip number four, decide whether you can itemize. As we discussed in tax bootcamp session number one, keeping track of your tax deductible expenses is a powerful way to lower your taxes. It's completely legal to reduce your tax bill as much as you can by taking advantage of every single tax benefit that you qualify for. If the total amount of your deductions exceeds the standard deduction for your filing status, you'll come out ahead by itemizing your deductions on Schedule A. Here are the standard deduction amounts that your total deductions must exceed in order to make it worthwhile to itemize for 2010. If you're single or married filing separately, your standard deduction is $5700, forehead of household, your standard deduction is $8400, and married filing jointly or a qualifying widow or widower, your standard deduction is $11,400. I love learning and anything that makes learning easier. If you're a parent and your child needs some homework help, then Ixcel is a right for your family. 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Visit ixl.com/moneygirl to get the most effective learning program out there at the best price. This episode is brought to you by AARP. Ten years from today, Lisa Schneider will trade in her office job to become the leader of a pack of dogs. As the owner of her own dog rescue, that is. A second act made possible by the reskilling courses Lisa's taking now with AARP to help make sure her income lives as long as she does. And she can finally run with the big dogs and the small dogs who just think they're big dogs. That's why the younger you are, the more you need AARP. Learn more at aarp.org/skills. Ryan Reynolds here for, I guess, my 100th mint commercial. No, no, no, no, no, no, no, no, no, no, no, no. Honestly, when I started this, I thought I'd only have to do like four of these. I mean, it's unlimited premium wireless for $15 a month. How are there still people paying two or three times that much? I'm sorry, I shouldn't be victim blaming here. Give it a try at midmobile.com/switch, whatever you're ready. $45 up from payment equivalent to $15 per month, new customers on first three month plan only, taxes and fees extra, speeds lower above 40 gigabytes of seat details. Tax filing tip number five, use the IRS website. If you have questions, there's a ton of information at irs.gov. Filing your return electronically through the IRS website is free, safe and the fastest way to get a tax refund. The IRS offers the following four electronic options. Number one, you can e-file through a tax professional. If you hire a tax pro to do your return, they typically e-file your return to the IRS. Number two, you can e-file your own return. If you have IRS approved tax software like TurboTax, you can submit your return electronically and even pay online. Number three, use fillable forms. If you don't have tax software, you can use free, fillable forms, which are simply electronic versions of the paper forms that you complete and submit online. And four, use free file. If you have adjusted gross income that's $58,000 or less, you qualify to use a special free service on the IRS site called free file. Free file gives you access to commercial tax software without having to buy it. You'll find links to everything I've mentioned and more on the MoneyGirl blog at quickandertietips.com. Tax filing tip number six, don't panic. If you realize that you won't have time to complete your tax return by the April 18 deadline, take a deep breath. You can request a six-month extension by submitting form 4868 using e-file or mailing in the paper form. However, an extension does not give you additional time to pay tax that you owe. The IRS expects your money on time or you'll be subject to interest and penalties. If you don't have the money to pay your taxes, you should still file your return or an extension and pay as much as you can. Contact the IRS by phone or go to irs.gov to find out what payment options are available. Tax filing tip number seven, hire a professional. As you've heard me say before, sometimes you're much better off having a tax pro do your return because they can save you time and money. That's certainly the case if you're self-employed or feel unsure that you're taking advantage of every tax deduction and credit that you can. When in doubt it's best to consult a tax professional or at a minimum use tax software to guide you through the filing process. Congratulations, you just made it through tax bootcamp. If you like the tips you get in the Money Girl podcast and want to take more control of your money, I think you'll like my book, Money Girl Smart Moves to Grow Rich. It's available at your favorite store in print or is an e-book for your Kindle, Nook, iPad, PC, Mac or smartphone. You can even download two free book chapters at smartmoves2growrich.com. If you're on Twitter, be sure to find me under the username, Laura Adams. I'm also on Facebook, just do a search for Money Girl. Submit your money questions through social media or email me at money@quickanddirtytips.com. If you forget any of my contact information, just go to the Money Girl section at quickanddirtytips.com. I'm glad you're listening. Cha-ching! That's all for now. Here to see of Money Girl, your guide to a richer life. We could try to explain what it feels like to get your work done on a John Deere. The way a Z-Track mower finishes in half the time you thought it would. Or how much easier it is to move mountains of soil with a one-series tractor. We could even go into detail about how it feels to tow up to 4,000 pounds behind a Gator SUV. 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