Tax day is here; Last minute filing can save money
The dreaded tax day is here. Even though filers got an extra two days from the government, millions of people will still wait until the very last minute.
“Taxes are not as scary as what people think they are. Find someone that you can trust to do them and make a relationship with them and they will take care of you and it will be a good relationship every year,” said Laura Dombach with Liberty Tax in York.
For many filers, at this point, it’s time for an extension. Many people will come in at the last minute having forgotten about their taxes and want that extra six months.
But, if you are looking to get everything done under the wire. it’s possible. The key is to have everything in order and maximize your deductions. For example, pennsylvania allows filers to claim unreimbursed business expenses like tools, uniforms and union dues. Also, if you are a teacher, even though the federal government only gives you credit for a $250 deduction, Pennsylvania will give you more.
If you are claiming mileage, make sure to have some kind of log because the IRS seems to be clamping down and might ask for evidence. Finally, healthcare is a big sticking point for the fed. Make sure you identify your coverage. If there is a gap in health care coverage for three months or more, there are significant penalties that the government will levy.
“A lot of people think that if I file my extension and I owe taxes, I have until October 17 to pay my taxes as well. But it doesn’t work that way. So, if you owe, file extension but pay as much as you can,” Dombach said.
Experts say the number one mistake that most people make is thinking that an extension means putting off any payments. The six month extension only grants an extension on the paperwork. If you owe money, you need to make a best guess to figure out what you may owe and send in that payment. If not, there are penalties, starting with the failure to file penalty, which will cost five percent a month of the total taxes owed up to 25 percent of the total.
Filing and not paying will cost you as well, one half of a percent of the balance you owe a month, up to 25 percent as well as late filing penalties.
Also, don’t forget about your local taxes. The federal extension will get you extra time from the federal and state government but you have to file a specific extension request with your local municipality to get credit. Then, maybe think about working with a professional so it doesn't happen again.
“It’s always rough to wait until the last minute because there are sometimes you sit at the desk with someone and realize that you forgot something and you don’t have time to get it. Never wait until the last minute, March or early April is always good,” said Dombach.
The deadline to file is tonight at 11:59 p.m.