4. Don’t forget what you did last year. Use your return from last year as a cheat sheet. This is especially helpful if you are on the margin between taking the standard deduction and itemizing, which could lower your tax liability.
To see whether itemizing makes sense, add up your individual deductions, including unreimbursed employee expenses, job search expenses and charitable contributions. (Keep in mind that some, like medical expenses and miscellaneous itemized deductions, have their own thresholds to be deductible.) Then check if the total exceeds the standard deduction for 2017, which is $6,350 for single filers and $12,700 for married couples filing jointly.
5. If you’re self-employed, make estimated tax payments. If you’re working in the gig economy or as a freelancer, you’re allowed to take advantage of business expense deductions that you may not be eligible for as a W-2 employee, such as start-up costs, computers, car expenses and so on, according to Greene-Lewis.
But you have to make quarterly tax payments using Form 1040-ES if you expect to owe more than $1,000. The first payment for tax year 2018 is due April 17.
6. E-file with direct deposit. If you expect to receive a refund this year, choosing to e-file with direct deposit will get you access to your money faster. Just be sure that the bank routing and account numbers entered on the return are accurate. Incorrect numbers can cause a refund to be delayed or worse — deposited into the wrong account.
7. If you need more time, get an extension. For taxpayers who just can’t meet the April deadline, requesting an extension will prevent steep late-filing penalties, Greene-Lewis said. You can use the IRS Free File to request an extension electronically or submit a paper Form 4868. But keep in mind that while an extension grants additional time to file, tax payments are still due on April 17.
“On the Money” airs on CNBC Saturdays at 5:30 a.m. ET. Check listings for air times in local markets.
More from Your Money, Your Future:
If you can’t pay what you owe the IRS by Tax Day, here’s what to do
Here’s how most Americans use their tax refund
IRS: Watch out for these dangerous tax scams
Be the first to comment