Your Money, Your Future
Your Money, Your Future

It's April: Here's why you shouldn't rush through your taxes

Key Points
  • Filers turned in more than 85 million income tax returns as of March 23.
  • The average refund so far is $2,925.
  • It's the last year for a slate of itemized deductions.
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Don't panic if you're still sitting on an incomplete tax return in early April. It'll get in the way of you saving money.

As of March 23, the Internal Revenue Service received 85.6 million tax returns, roughly on pace compared to the same point last year. In all, the agency expects it will receive more than 155 million tax returns this year.

Even the stragglers can eke out a tax win this season, provided they don't haphazardly throw their return together and rush it out the door by April 17.

"The key elements are to double-check your return and make sure you get every deduction you're entitled to," said Brian Ashcraft, corporate regional director at Liberty Tax Service.

Slow down and consider these tax tips before you file.

Get more time

Secure an appointment as soon as you can. Just because your tax professional was able to get you an extension last year, you shouldn't assume that he or she can do it this year.

"They're not allowed to file an extension unless you request it or give them permission," said Cari Weston, director of tax practice and ethics at the American Institute of CPAs.

Also, if you haven't lined up a tax preparer, avoid strolling into the first practice with empty seats. Get a trusted recommendation first.

Here’s what to do if you can’t pay your tax bill on time

"The kind of people who might have availability now might not be the kind of people you want to work with," said Weston. "The better they are, the more in-demand they are."

Don't forget that extensions only give you more time to file. If you owe taxes, you'll still need to pay them by April 17. Your preparer can help you with that, too. He or she will give you an estimate of what you owe so you can pay the taxman on time.

Dig up your cheat sheet

Whether you prepare your own taxes or you need to gather your documents for your CPA, take a peek at your return from last year.

This is especially important for individuals who receive piles of 1099s or who get income from Social Security: The last thing you want to do is forget to report some income you've received.

See below for some of the tax forms you'll need in order to file.

If you can't track down a 1099 — or if you have to do a little legwork to hunt down the cost basis of a stock — ask for an extension.

Your preparer can help you build your own cheat sheet by offering you a tax organizer when you get your taxes back or before you file. "It shows what you had last year," said Weston. "Use it as a guide."

Don't miss these breaks

The other reason you should go through your previous year's tax return is to make sure you don't miss out on any credits or deductions.

This is especially key for this tax season, as the Tax Cuts and Jobs Act has done away with a slate of itemized deductions and doubled the standard deduction.

4 quirky tax deductions that could save you money

That means that your 2017 is the last time you may be able to nab certain breaks, including a variety of miscellaneous itemized deductions and the full value of your state and local taxes if they exceed $10,000.

Last-minute filers are likely to miss these deductions if they rush through the process, said Debbie Freeman, director of financial planning at Peak Financial Advisors in Denver.

Student loan interest: You can deduct the lesser of $2,500 or the amount of interest paid during the year, subject to income phaseouts.

Moving expenses: You moved due to a change in your job and your new workplace is at least 50 miles farther away from your old home versus the distance between your old dwelling and your old workplace.

Property taxes: It's not just your primary home that can qualify, but also your second home and perhaps even your timeshare.

Noncash charitable contributions: Be sure to include your receipts. You'll need to file Form 8283 if your deduction for all noncash gifts is over $500.

Contributions to certain tax-advantaged accounts: That includes your health savings account and your individual retirement account.

Finally, if you hurry through your return, you might miss out on the fact that you have to report your nondeductible IRA contributions for the year.

This way, you establish basis in your IRA, and when you start taking distributions in retirement, that portion will come out tax free, said Freeman.

It's all the more reason to slow down as you proceed.

"Don't allow the time crunch to affect your work," Freeman said. "Sit down and focus on your taxes."

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