With less than a week before the April 15 filing deadline, there's still time and no need to panic
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Sponsored by Thomas Stephen & Company, LLP - Certified Public Accountants
Written by Barrett Stutzman, Tax Supervisor
We're now less than a week from the April 15thindividual income tax filing deadline. Ifbryou’ve yet to file there’s no need to panic just yet. We’re here to help. Use these last minute tips and tricks; you’llbrbe glad you did.
1.) Take advantage of the IRA contributionbrdeduction.
Taxpayers have until April 15th,br2013 to make an IRA contribution and elect to claim the deduction on their 2012brtax returns.
2.) brFile electronically and avoidbrworrying about the dreaded postmark date.
Avoid last-minute trips to thebrpost office and the risk of your return getting lost in the mail. Additionally it saves time and money. If you have a refund coming, e-filing is thebrfastest way to get it.
3.) brKeepbrrecords of charitable activity.
Cash donationsbrto charities may seem obvious but you can also deduct things like mileagebrdriving from charity to charity or expenses related to singing in your localbrchurch choir.
4.) brAvoidbrobvious audit red flags.
Increased 1099 reporting rules and improvedbrtechnology at the IRS have made it easier than ever for problems on your taxbrreturn to stand out. It's also easy tobrcompare you against taxpayers in your bracket. brSo if you earn $50,000 to $100,000 annually and claim to give $20,000 abryear to charity, you can expect an audit since the "averagebrcontribution" in this income bracket is just $2,600. In addition, one ofbrthe most abused and misunderstood deductions surrounds writing off the costs ofbra home office. The IRS requires thebrspace to be used exclusively and solely for business purposes so don't risk embellishment.
5.) brMakebrsure your children's returns get filed.
If your dependents received a W-2brduring the year, a separate tax return should be filed. However, that doesn't mean you can't stillbrclaim them as a dependent on your return, they just need to specify this whenbrfiling their own 1040.
Additionally, if your childrenbrreceived investment income in their name during the tax year, you shouldbrfamiliarize yourself with the “kiddie tax” rules. Generally when a child who is under 18, or abrfull-time student under age 24, had greater than $1,900 in investment incomebrAND a tax rate lower than their parents', investment income will be taxed atbrthe parents' rate.
6.) Ask for an extension.
The IRS offers an automaticbrsix-month extension of time to file your 1040 if you can't have it ready bybrApril 15th. However this isbronly an extension of time to file your return, not pay any liability. If at the time of the extension, yourbrwithholding and estimated payments do not meet the lesser of 90% of currentbryear tax liability, or 110% of last year’s tax liability, the difference shouldbrbe paid in order to avoid penalties.
If the reason for your extensionbris simply because you don't have the money to pay at this time, there arebroptions for you too. The IRS offersbrpayment plans but interest rates are generally higher than those you may bebrable to get on a small loan from a bank or even credit card company. Choosing one of these alternatives may bebrless expensive in the long run.
7.) Hire a tax professional.
If all this sounds like too muchbrto handle, it may be worth talking to a tax professional. If you're looking for assistance with yourbrindividual or business income tax return, Thomas Stephen & Company is abrfull service accounting firm with offices in Dallas and Southlake. Our accountants and advisors have establishedbra reputation for providing clients timely, insightful advice and a betterbrunderstanding of their businesses across a broad spectrum of industries. For more information, contact our professionalsbrin one of the offices below.
Southlake
Susan Todd: (817) 552-3100
Dallas
Barrett Stutzman: (214)253-2059
Thomas Stephen: (214)824-2640