WASHINGTON — The deadline for filing your income tax returns is April 17, which is really not as much time as it sounds.
The big changes in the tax law passed last fall mostly don’t kick in until tax time next year, but there are still a few things to keep in mind as crunch time approaches.
ABC News correspondents Scott Goldberg and Daria Albinger have hosted another series of tax tips to help get taxpayers ready for the big day. Here are some of their most valuable tips:
Get organized
Going paperless with your financial institutions has a lot of advantages, but there’s one drawback: You have to remember to download all sorts of forms, including for the mortgage-interest deduction. “You may have said, ‘OK; I want to be paperless’ … [but] you now have to go to that website and download that document,” tax accountant Janice Hayman said. And of course, you need to have all your receipts together for any expenses you want to deduct. If you’re not there, the only advice left is — well, at least you’ve got two extra days: The deadline to file is April 17 this year. (Thinkstock)
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Finding a tax preparer
A lot of people use professional tax preparers to help with their taxes, but it’s important to find someone who can actually help. ABC News correspondent Rebecca Jarvis said it’s important to check whether they’re licensed, specifically whether they have a Preparer Tax Identification Number. With such a number, “the IRS knows [they’re] actually legitimately somebody who is able to file taxes on behalf of other people.” A licensed preparer is also willing and able to represent you in front of the IRS if you’re audited. You also need to look for someone who charges a set fee, not a percentage of the return they can get you. You want someone who can get you the biggest refund possible within the law and “not be playing the system.” (AP Photo/Susan Walsh, File)
AP Photo/Susan Walsh, File
Hurricane expenses
If your income dropped because of Harvey, Irma or Maria, “you might qualify for the Earned Income Credit when maybe you haven’t before,” said IRS spokesman Eric Smith. If you didn’t get insurance payments for your losses, “there’s a more liberal method for computing your deduction … You can actually get a higher standard deduction; you don’t even have to itemize, as you normally would.” (AP Photo/Carlos Giusti, File)
AP Photo/Carlos Giusti, File
What if you can’t pay?
The IRS has options, but asking for more time isn’t among them. “The extension is to file,” Hayman said. “You get an extension of time to file, but payment is due April [17].” If you can’t pay it all, pay what you can — you’ll get 120 days to pay the rest, with interest and penalties but no fees. You can also ask for fixed monthly installments (there’s an application and some fees). There’s also what’s called an offer in compromise, which also requires an application. (Thinkstock)
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Cheating
Budget cuts and the manpower needed to implement the new tax laws might leave you thinking you can get away with cheating on your taxes. Think again, Hayman said. “It is so easy now to track income. And face it — not reporting income is fraud.” “You want to abide by the rules as best you know them.” You won’t go to prison if you make a mistake, but you can still end up paying serious fines. Most commonly, people get caught taking illegitimate deductions or not reporting income that someone else reported they paid you. (WTOP/Neal Augenstein)
WTOP/Neal Augenstein
Gig economy
A lot of people have a side income nowadays — some, in fact, make a living from several “side jobs.” The people who are paying you may not have considered the sum enough to have sent you a 1099 form, but that doesn’t mean you’re in the clear tax-wise, Hayman said. “You have to report everything you earn, regardless of whether it’s reported to the IRS,” Hayman said. There’s a bright side. If you have enough outside income, you “no doubt have a self-employment element to you, and a lot of business deductions you may not have thought of.” This might be a good situation to ask a professional to help you out. (AP Photo/Gene J. Puskar, File)
AP Photo/Gene J. Puskar, File
IRS impersonators
The IRS is old-school, and that can help you see through a scam. It has been happening all over the country, including the D.C. area — people are receiving phone calls from scammers saying they’re from the IRS and demanding immediate payment of some tax or another, with a credit or debit card over the phone, or you’ll be arrested. That’s never, ever really the IRS, Hayman said. They don’t call; they don’t email; they send old-fashioned paper letters, at least at first. “The only time they could call you is if you have this ongoing exchange with them,” Hayman said. “And then of course you’d have a number to call back and verify that it’s them.” When it is time to pay, don’t give information over the phone — the IRS is happy to take a check. And if you want to pay with a card, the IRS website has a list of approved payment processors. (Thinkstock)
Thinkstock
