April 15 is fast-approaching, and if you're like many people, chances are your tax prep is somewhere on the spectrum between mild disarray to frantic, panicked scrambling. There's just something about doing our taxes that makes many of us revert to slacker college student mode, waiting till the last minute to throw together that report we've known about for months.
But there is hope. There are plenty of last-minute tax tips that can still save you a hunk of change, even in the 11th hour. So put down that shoebox of receipts, take a deep breath, and read on:
File Even If You Can't Pay
Don't fall into the trap of thinking that if you can't pay your taxes, you may as well not file. You're going to wind up paying a penalty either way, but it will be much bigger if you don't file at all.
Consider this: The penalty for failing to pay your taxes is 0.5 percent of whatever you owe. So, if you owe $5,000, you'll be charged $25/month.
In contrast, if you don't file at all, you'll be charged a whopping 5 percent of your outstanding tax bill. Instead of $25/month, you'll be looking at a penalty of $250/month for a $5,000 tax bill.
Don't Neglect to Pay If You're Getting an Extension
Are you filing for a tax extension? You still need to mail the IRS a check.
Filing for an extension does not exempt you from having to pay by the April 15 deadline; it just extends your deadline for turning in your tax return by six months. If you don't pay, you're still liable for that 0.5 percent penalty.
How do you pay if you don't know exactly how much you'll owe? Give your best estimate. There are a variety of free tax estimator tools online that can help you get a basic idea of what you'll owe. You may still be charged interest and penalties for the remaining balance if you wind up making an underpayment, but it will be considerably less than if you didn't make a good-faith payment at all. (If you can afford it, make an overpayment, just to ensure that you won't pay a penalty.)
Maximize Your Deductions and Credits
One of the biggest mistakes taxpayers make is failing to take full advantage of every deduction and credit that's available to them. Yes, it will take you a little more time, but if you skip this step, you're leaving money on the table.
Whether you're an individual, a small business owner or anything in between, chances are you'll qualify for some type of deduction. Here are some of popular examples:
• Are you a homeowner? Your mortgage interest is tax-deductible.
• Do you have a child under age 13? Some childcare expenses are tax-deductible, at $3,000 per qualifying individual, up to a maximum of $6,000.
• Did you pay for college for either yourself or your child? If your income falls under certain guidelines (modified adjusted gross income of $80,000 for single filers and $160,000 for joint filers), you may be eligible for a tax credit.
• Are you a lower-income individual or couple? You may be eligible for an additional "Saver's Credit" of $1,000 (individual) or $2,000 (couple) for contributing to your own retirement account.
Maximizing your deductions is a great idea for all taxpayers. But the qualifying activity -- paying mortgage interest, paying for childcare -- had to happen last year.
In other words, this information can help you take advantage of the deductions and credits that you already qualify to receive. But it can't necessarily help you qualify for more.
In the next three sections, let's look at steps you can take today to retroactively reduce your tax bill.
Contribute to a Traditional IRA
Most tax deduction strategies, unfortunately, require you to take action before the end of the calendar year, so you may too late to knock a chunk off your 2013 tax bill. But you're not totally out of luck. Even if you're up against the wire, you can still squeeze some extra savings from your tax return by contributing to a traditional IRA.
If you do so on or before April 15, and specify that your contribution is a prior-year contribution, you could be eligible to deduct as much as $5,500 from your 2013 tax return. (Up to $6,500 if you're over 50.) Extra money in your IRA and a tax deduction? I call that a win-win.
Contribute to a Health Savings Account
If you have high-deductible health insurance (a $1,200+ deductible for single coverage or $2,400+ for family), you can snag additional savings by contributing to your health savings account, or HSA.
The maximum contribution for tax year 2013 is $3,250 for individual coverage and $6,450 for family coverage (with an extra $1,000 in "catch-up" contributions if you're 55 or older). And your deadline for making these contributions is April 15, 2014.
In other words: If you can move this money into your HSA account before this years' tax-filing deadline, you can enjoy an additional tax deduction.
Likewise, you can make retroactive contributions to your 401k account that apply towards last years' tax bill. Move money into your 401k and earmark this as a "previous year contribution." Like the HSA and Traditional IRA, your deadline for making 2013 contributions is April 15, 2014.
One final tip: Don't let your last-minute rush lead you to make costly mistakes. Three of the most common mistakes taxpayers make are math errors, incorrect Social Security Numbers and neglecting to sign and date their return.
Use tax software or hire a CPA (or, at the very least, double-check your math with a calculator). Proofread everything to make sure you didn't make any typos or transpose any numbers. And make sure the signature and date are complete before you hit "send" or put that envelope in the mail. Don't delay your refund by carelessness.
Get a Head Start for Next Year
The IRS estimates that 20-25 percent of all taxpayers wait until the last two weeks to file their taxes. If this describes you, you're still in luck.
Follow the above tips to maximize your savings. Then do yourself a favor and make a date with yourself to start your 2014 return much, much earlier. You'll thank yourself for it.
29 Ways You Waste Cash
29. Impulse Buys(01 of29)
Open Image ModalWho doesn't know that impulse purchases are a bad idea? I've even realized it was a bad idea as I was doing it. So here are three quick tips: 1. Make a shopping list. Take it with you and stick to it. 2. Eat beforehand. An empty stomach can doom the most prepared shopper, especially at the supermarket. 3. Shop alone. Bringing children (or a significant other who acts like a child) is a sure way to fill your cart with impulse buys. (credit:<a href="http://www.flickr.com/" role="link" rel="nofollow" class=" js-entry-link cet-external-link" data-vars-item-name="Flickr:" data-vars-item-type="text" data-vars-unit-name="5b9df846e4b03a1dcc8fb475" data-vars-unit-type="buzz_body" data-vars-target-content-id="http://www.flickr.com/" data-vars-target-content-type="url" data-vars-type="web_external_link" data-vars-subunit-name="before_you_go_slideshow" data-vars-subunit-type="component" data-vars-position-in-subunit="94" data-vars-position-in-unit="97">Flickr:</a><a href="http://www.flickr.com/people/lrargerich/" role="link" rel="nofollow" class=" js-entry-link cet-external-link" data-vars-item-name=" lrargerich" data-vars-item-type="text" data-vars-unit-name="5b9df846e4b03a1dcc8fb475" data-vars-unit-type="buzz_body" data-vars-target-content-id="http://www.flickr.com/people/lrargerich/" data-vars-target-content-type="url" data-vars-type="web_external_link" data-vars-subunit-name="before_you_go_slideshow" data-vars-subunit-type="component" data-vars-position-in-subunit="95" data-vars-position-in-unit="98"> lrargerich</a>)
28. Buying Online Without Comparison Shopping(02 of29)
Open Image ModalWhen you shop online, there are hundreds of sites competing for your business. Buy those shoes at the first site you go to and you may be wasting money. Compare the purchase and shipping price at three or more sites before you buy anything. (credit:<a href="http://www.flickr.com/" target="_blank" role="link" rel="nofollow" class=" js-entry-link cet-external-link" data-vars-item-name="Flickr:" data-vars-item-type="text" data-vars-unit-name="5b9df846e4b03a1dcc8fb475" data-vars-unit-type="buzz_body" data-vars-target-content-id="http://www.flickr.com/" data-vars-target-content-type="url" data-vars-type="web_external_link" data-vars-subunit-name="before_you_go_slideshow" data-vars-subunit-type="component" data-vars-position-in-subunit="92" data-vars-position-in-unit="95">Flickr:</a><a href="http://www.flickr.com/people/theogeo/" target="_blank" role="link" rel="nofollow" class=" js-entry-link cet-external-link" data-vars-item-name=" theogeo" data-vars-item-type="text" data-vars-unit-name="5b9df846e4b03a1dcc8fb475" data-vars-unit-type="buzz_body" data-vars-target-content-id="http://www.flickr.com/people/theogeo/" data-vars-target-content-type="url" data-vars-type="web_external_link" data-vars-subunit-name="before_you_go_slideshow" data-vars-subunit-type="component" data-vars-position-in-subunit="93" data-vars-position-in-unit="96"> theogeo</a>)
27. Paying For Protection You Don't Need(03 of29)
Open Image Modal26. Being Disorganized(04 of29)
Open Image ModalBeing disorganized about your finances leads to costly late payment fees and overdraft charges. You can easily rack up hundreds in fees. For example, even a single $25 late fee per month will cost $300 extra a year. Set up bill reminders and keep your checkbook balanced. (credit:<a href="http://www.flickr.com/" role="link" rel="nofollow" class=" js-entry-link cet-external-link" data-vars-item-name="Flickr:" data-vars-item-type="text" data-vars-unit-name="5b9df846e4b03a1dcc8fb475" data-vars-unit-type="buzz_body" data-vars-target-content-id="http://www.flickr.com/" data-vars-target-content-type="url" data-vars-type="web_external_link" data-vars-subunit-name="before_you_go_slideshow" data-vars-subunit-type="component" data-vars-position-in-subunit="87" data-vars-position-in-unit="90">Flickr:</a><a href="http://www.flickr.com/people/alismith44/" role="link" rel="nofollow" class=" js-entry-link cet-external-link" data-vars-item-name=" aliwest44" data-vars-item-type="text" data-vars-unit-name="5b9df846e4b03a1dcc8fb475" data-vars-unit-type="buzz_body" data-vars-target-content-id="http://www.flickr.com/people/alismith44/" data-vars-target-content-type="url" data-vars-type="web_external_link" data-vars-subunit-name="before_you_go_slideshow" data-vars-subunit-type="component" data-vars-position-in-subunit="88" data-vars-position-in-unit="91"> aliwest44</a>)
25. Expensive Cell Phone Plans(05 of29)
Open Image Modal24. Not Using Coupons(06 of29)
Open Image Modal23. Oil Changes(07 of29)
Open Image ModalCars don't need oil changes as frequently as they used to. If you're getting your oil changed every 3,000 miles, you're probably doing it too often (and wasting money). Follow the recommended mileage in your owner's manual. (credit:<a href="http://www.flickr.com/" role="link" rel="nofollow" class=" js-entry-link cet-external-link" data-vars-item-name="Flickr:" data-vars-item-type="text" data-vars-unit-name="5b9df846e4b03a1dcc8fb475" data-vars-unit-type="buzz_body" data-vars-target-content-id="http://www.flickr.com/" data-vars-target-content-type="url" data-vars-type="web_external_link" data-vars-subunit-name="before_you_go_slideshow" data-vars-subunit-type="component" data-vars-position-in-subunit="76" data-vars-position-in-unit="79">Flickr:</a><a href="http://www.flickr.com/people/rstinnett/" role="link" rel="nofollow" class=" js-entry-link cet-external-link" data-vars-item-name=" robertstinnett" data-vars-item-type="text" data-vars-unit-name="5b9df846e4b03a1dcc8fb475" data-vars-unit-type="buzz_body" data-vars-target-content-id="http://www.flickr.com/people/rstinnett/" data-vars-target-content-type="url" data-vars-type="web_external_link" data-vars-subunit-name="before_you_go_slideshow" data-vars-subunit-type="component" data-vars-position-in-subunit="77" data-vars-position-in-unit="80"> robertstinnett</a>)
22. Premium Fuel(08 of29)
Open Image Modal21. Not Taking Advantage Of A 401(K) Company Match(09 of29)
Open Image ModalMany companies will match an employee's 401(k) contribution up to a certain percent. If you're not contributing enough to meet the maximum match, you're losing out on free money. Ask your HR department for information on your company match. (credit:<a href="http://www.flickr.com/" role="link" rel="nofollow" class=" js-entry-link cet-external-link" data-vars-item-name="Flickr:" data-vars-item-type="text" data-vars-unit-name="5b9df846e4b03a1dcc8fb475" data-vars-unit-type="buzz_body" data-vars-target-content-id="http://www.flickr.com/" data-vars-target-content-type="url" data-vars-type="web_external_link" data-vars-subunit-name="before_you_go_slideshow" data-vars-subunit-type="component" data-vars-position-in-subunit="71" data-vars-position-in-unit="74">Flickr:</a><a href="http://www.flickr.com/people/urban_data/" role="link" rel="nofollow" class=" js-entry-link cet-external-link" data-vars-item-name=" urban_data" data-vars-item-type="text" data-vars-unit-name="5b9df846e4b03a1dcc8fb475" data-vars-unit-type="buzz_body" data-vars-target-content-id="http://www.flickr.com/people/urban_data/" data-vars-target-content-type="url" data-vars-type="web_external_link" data-vars-subunit-name="before_you_go_slideshow" data-vars-subunit-type="component" data-vars-position-in-subunit="72" data-vars-position-in-unit="75"> urban_data</a>)
20. Bill Pay Convenience Fees(10 of29)
Open Image ModalSome online or over-the-phone bill payment services come with fees. For example, my electric company charges $2.95 to pay online through their website. Instead, I use free bill pay through my bank. I still get to pay online, but I skip the fee and save $35.40 a year. (credit:<a href="http://www.flickr.com/" role="link" rel="nofollow" class=" js-entry-link cet-external-link" data-vars-item-name="Flickr:" data-vars-item-type="text" data-vars-unit-name="5b9df846e4b03a1dcc8fb475" data-vars-unit-type="buzz_body" data-vars-target-content-id="http://www.flickr.com/" data-vars-target-content-type="url" data-vars-type="web_external_link" data-vars-subunit-name="before_you_go_slideshow" data-vars-subunit-type="component" data-vars-position-in-subunit="69" data-vars-position-in-unit="72">Flickr:</a><a href="http://www.flickr.com/people/kalleboo/" role="link" rel="nofollow" class=" js-entry-link cet-external-link" data-vars-item-name=" kalleboo" data-vars-item-type="text" data-vars-unit-name="5b9df846e4b03a1dcc8fb475" data-vars-unit-type="buzz_body" data-vars-target-content-id="http://www.flickr.com/people/kalleboo/" data-vars-target-content-type="url" data-vars-type="web_external_link" data-vars-subunit-name="before_you_go_slideshow" data-vars-subunit-type="component" data-vars-position-in-subunit="70" data-vars-position-in-unit="73"> kalleboo</a>)
19. Hotel Fees(11 of29)
Open Image Modal18. Paying For Services You Don't Use(12 of29)
Open Image ModalAutomatic withdrawals make us lazy with our money. If you're paying for something each month - like a gym membership, magazine subscription, or streaming service - make sure you use it, or those charges will add up to wasted cash. For example, here are mine:
1. Gym membership - $29.99 per month
2. Netflix subscription - $9.99 per month
3. Popular Mechanics subscription - $1 per month
That's more than $40 a month. I make sure I get my money's worth out of them. (credit:<a href="http://www.flickr.com/" target="_blank" role="link" rel="nofollow" class=" js-entry-link cet-external-link" data-vars-item-name="Flickr:" data-vars-item-type="text" data-vars-unit-name="5b9df846e4b03a1dcc8fb475" data-vars-unit-type="buzz_body" data-vars-target-content-id="http://www.flickr.com/" data-vars-target-content-type="url" data-vars-type="web_external_link" data-vars-subunit-name="before_you_go_slideshow" data-vars-subunit-type="component" data-vars-position-in-subunit="64" data-vars-position-in-unit="67">Flickr:</a><a href="http://www.flickr.com/people/asiaticleague/" target="_blank" role="link" rel="nofollow" class=" js-entry-link cet-external-link" data-vars-item-name=" Asiatic League" data-vars-item-type="text" data-vars-unit-name="5b9df846e4b03a1dcc8fb475" data-vars-unit-type="buzz_body" data-vars-target-content-id="http://www.flickr.com/people/asiaticleague/" data-vars-target-content-type="url" data-vars-type="web_external_link" data-vars-subunit-name="before_you_go_slideshow" data-vars-subunit-type="component" data-vars-position-in-subunit="65" data-vars-position-in-unit="68"> Asiatic League</a>)
17. Ignoring Your Insurance(13 of29)
Open Image ModalBecoming complacent about your insurance can cost you money. Stacy recommends shopping around for new insurance once a year - because when premiums drop or new, cheaper policies are available, no one's going to tell you if you don't ask. Check out our insurance comparison tool to shop for a better rate. (credit:<a href="http://www.flickr.com/" target="_blank" role="link" rel="nofollow" class=" js-entry-link cet-external-link" data-vars-item-name="Flickr:" data-vars-item-type="text" data-vars-unit-name="5b9df846e4b03a1dcc8fb475" data-vars-unit-type="buzz_body" data-vars-target-content-id="http://www.flickr.com/" data-vars-target-content-type="url" data-vars-type="web_external_link" data-vars-subunit-name="before_you_go_slideshow" data-vars-subunit-type="component" data-vars-position-in-subunit="62" data-vars-position-in-unit="65">Flickr:</a><a href="http://www.flickr.com/people/comedynose/" target="_blank" role="link" rel="nofollow" class=" js-entry-link cet-external-link" data-vars-item-name=" comedy_nose" data-vars-item-type="text" data-vars-unit-name="5b9df846e4b03a1dcc8fb475" data-vars-unit-type="buzz_body" data-vars-target-content-id="http://www.flickr.com/people/comedynose/" data-vars-target-content-type="url" data-vars-type="web_external_link" data-vars-subunit-name="before_you_go_slideshow" data-vars-subunit-type="component" data-vars-position-in-subunit="63" data-vars-position-in-unit="66"> comedy_nose</a>)
16. Wasting Utilities(14 of29)
Open Image ModalGrowing up, I got several lectures on leaving the lights on or keeping the front door open and "air conditioning the entire neighborhood." I didn't care too much then because I didn't pay the bill, but now I'm strict with my electricity usage. The result: My summer utility bills rarely top $100. If you've got lights on in a room you're not sitting in, you're wasting money. (credit:<a href="http://www.flickr.com/" target="_blank" role="link" rel="nofollow" class=" js-entry-link cet-external-link" data-vars-item-name="Flickr:" data-vars-item-type="text" data-vars-unit-name="5b9df846e4b03a1dcc8fb475" data-vars-unit-type="buzz_body" data-vars-target-content-id="http://www.flickr.com/" data-vars-target-content-type="url" data-vars-type="web_external_link" data-vars-subunit-name="before_you_go_slideshow" data-vars-subunit-type="component" data-vars-position-in-subunit="60" data-vars-position-in-unit="63">Flickr:</a><a href="http://www.flickr.com/people/emdot/" target="_blank" role="link" rel="nofollow" class=" js-entry-link cet-external-link" data-vars-item-name=" emdot" data-vars-item-type="text" data-vars-unit-name="5b9df846e4b03a1dcc8fb475" data-vars-unit-type="buzz_body" data-vars-target-content-id="http://www.flickr.com/people/emdot/" data-vars-target-content-type="url" data-vars-type="web_external_link" data-vars-subunit-name="before_you_go_slideshow" data-vars-subunit-type="component" data-vars-position-in-subunit="61" data-vars-position-in-unit="64"> emdot</a>)
15. Dining Out(15 of29)
Open Image Modal14. Morning Lattes(16 of29)
Open Image ModalIn my area, a Grande Caramel Macchiato costs $4.55. Buy one every weekday and you'll spend $22.75 a week, $91 a month, and $1,092 a year. By comparison, a 16 ounce bag of coffee costs me $5.99 and I can make about 82 cups per bag. That is 7 cents per cup, a savings of $4.48 a day. Make your coffee at home and skip the fancy coffee-house drinks. (credit:<a href="http://www.flickr.com/" role="link" rel="nofollow" class=" js-entry-link cet-external-link" data-vars-item-name="Flickr:" data-vars-item-type="text" data-vars-unit-name="5b9df846e4b03a1dcc8fb475" data-vars-unit-type="buzz_body" data-vars-target-content-id="http://www.flickr.com/" data-vars-target-content-type="url" data-vars-type="web_external_link" data-vars-subunit-name="before_you_go_slideshow" data-vars-subunit-type="component" data-vars-position-in-subunit="55" data-vars-position-in-unit="58">Flickr:</a><a href="http://www.flickr.com/people/kansirnet/" role="link" rel="nofollow" class=" js-entry-link cet-external-link" data-vars-item-name=" Kansir" data-vars-item-type="text" data-vars-unit-name="5b9df846e4b03a1dcc8fb475" data-vars-unit-type="buzz_body" data-vars-target-content-id="http://www.flickr.com/people/kansirnet/" data-vars-target-content-type="url" data-vars-type="web_external_link" data-vars-subunit-name="before_you_go_slideshow" data-vars-subunit-type="component" data-vars-position-in-subunit="56" data-vars-position-in-unit="59"> Kansir</a>)
13. Buying Software(17 of29)
Open Image Modal12. Long-Distance Calls(18 of29)
Open Image Modal11. Baggage On Airlines(19 of29)
Open Image Modal10. Full-Priced College Degrees(20 of29)
Open Image Modal9. Credit Reports(21 of29)
Open Image Modal8. Buying Books(22 of29)
Open Image Modal7. Brand Names(23 of29)
Open Image Modal6. 411 Calls(24 of29)
Open Image Modal5. ATM Fees(25 of29)
Open Image Modal4. Credit Card Interest(26 of29)
Open Image Modal3. Bottled Water(27 of29)
Open Image Modal2. Checking Accounts(28 of29)
Open Image Modal1. Cable TV(29 of29)
Open Image Modal