WASHINGTON — Taxes are due soon. Since we don’t have much time, here’s the best tip I can give to those who haven’t filed their taxes yet, but plan to today: Find a post office that is open late.
For everyone else, here are my top four tax tips on Tax Day:
Filing an extension
If you haven’t finished preparing your taxes, filing an extension is easy to do. The IRS grants them automatically as long as you file the extension by April 18. This gives you six months to get your paper work in order. Keep in mind that if you owe any tax, that payment is still due today. You can file an extension online through Turbo Tax and other similar programs.
Review your withholding
If you owe a lot of tax or are receiving a big refund, you may want revisit the withholding form you filled out when you started with your company. Chances are, things have changed. Having a child or two, getting a raise or buying a house all impact how much you should withhold. Make changes to your W-4 so you’re not left with a surprise tax bill or left to find out you’ve lent Uncle Sam your money without getting any interest when April 18 comes again next year.
Smooth out your tax payments
If you have irregular income because you receive commissions or big quarterly bonuses, your payroll system doesn’t know this. It does the math and assumes that you’re paid that amount all the time. So your tax payment may be under-withheld for your regular paychecks and your bonuses are taxed as if you’re in the top tax bracket. You can smooth out your tax payments by figuring out what you expect to make this year and have a certain percent withheld from your paychecks.
Simplify your quarterly payment process
Rather than having to file on a quarterly basis with the Fed and State, my advice is to simplify, if possible. Increase the amount withheld for taxes from IRAs, Social Security or a pension. No more filling out forms and writing checks each quarter.
Keep in mind, April 18 is a false deadline. The best time to prepare for your taxes is before Dec. 31, when there’s still time to make and implement changes to reduce your taxes.
© 2015 WTOP. All Rights Reserved.