The deadline for filing your taxes comes around every year in mid-April.
And nobody who wants to leave money on the table unnecessarily.
Here are five last-minute strategies to reduce your taxes this year and every year.
First, talk to your HR department
You should never assume when it comes to learning what kinds of tax benefits, credits, or deductions you may be entitled to.
Talk to your employer’s human resources department and ask if you qualify for any employer-related tax deductions.
This can include contributing to a 401(k) or deductions for dependent care, to name just two.
Contribute to a personal retirement plan
Depending on where you live and your retirement plan status, your IRA contributions are probably tax-deductible.
If you withdraw from your Roth IRA after five years of ownership and are 59 ½ or older, then the withdrawals are tax-free.
If you have a 401(k) at work, you can still put money in an IRA, up to the total personal limits for all plans.
Take educational deductions
If you have a kid in college, the money you spend on tuition, books and more can be deducted and might even mean college is essentially free for your student.
If you go back to school yourself for any reason, degree-seeking or not, you can get a deduction for improving your educational attainment.
Get the small business break
One of the key deductions recently passed into law the qualified business income deduction. Basically, you can reduce your taxable income from a business by 20% if you qualify.
If your work status changed in the past year and you are now a contractor rather than employee, you likely qualify for this important tax break. You don’t have to incorporated or anything complicated, just reporting business income.
Fill out tax returns correctly
File your taxes on time and before the deadline. And make certain that your tax return data is correct before filing. Waiting until the last moment to file your tax return will make it among the last to be processed.
Filing deadlines could be extended the I.R.S. Or tax return deliveries could be postponed due to large processing backlogs.
Procrastinating or rushing to file your taxes could cause you to make unintentional mistakes or leave out crucial data. And making mistakes and leaving out data on your tax return could create serious problems for you.
You could be required to file a document called an amended tax return. An amended tax return is a legally corrective tax document. Filing an amended tax return says that the prior return contained incorrect information.
Depending on why your tax return information is faulty, your return could get delayed. Or you could get audited.