8 Last-Minute Tax Filing Tips

With April 18—the last day to do taxes for 2021—looming, you might be feeling the pressure to get your return filed accurately and on time. But don’t stress: These last-minute tax tips can help you handle tax day like a pro and potentially help you save some cash and stress along the way.

1. File On-Time

For your returns to be considered “on-time” and avoid paying late filing penalties—not to mention interest on what you owe—you’ll need to either electronically file or mail your returns by midnight on April 18, 2022. That means a timestamp (for e-filed returns) or a postmark (for mailed returns) showing April 18. If you won’t be able to file on time for any reason, be sure to file an extension.

Gail Rosen, a CPA in Martinsville, NJ, says to remember that an extension isn’t an extension of time to pay if you owe.

“If you do not pay your 2021 liability by April 18, you will be subject to penalties and interest on the amount you do land up owing for 2021,” she says. “Penalties plus interest are a very expensive interest rate on a loan. So don’t look at an extension as a way of putting off the inevitable pain of paying.”

2. File for Free if You Can

The IRS estimates that 70 percent of American taxpayers qualify to file their taxes for free at one of the many IRS Free File partners. If you’re worried about getting zapped with the unpopular forced upgrade fee at popular online tax filing sites such as TurboTax, H&R Block and TaxSlayer, check to see if you qualify to file for free (including a free state tax return) before you start inputting your financial information.

3. Double Check Your Deductions

If you feel confident about the deductions your online tax software found for your return, that’s fantastic. But Eric Bronnenkant, head of tax at Betterment, says there are two prime opportunities for deductions that many taxpayers overlook, especially if you have some extra cash on hand: IRA deductions and HSA deductions.

Make an IRA Contribution

“Maxing out the traditional or Roth IRA by April 18th is a great way to save money for the long term,” says Bronnenkant, highlighting one of the most popular types of retirement savings accounts. “The 2021 contribution limit for [IRAs] is $6,000 for individuals under 50 and $7,000 for individuals 50 and older.”

Making a contribution to a traditional IRA can reduce your tax bill (as those contributions are made pre-tax). Contributions to Roth IRAs aren’t tax deductible, but can still help you max out the annual IRS limits for retirement savings, which will give your money more time to grow.

Max-Out Your Health Savings Account (HSA)

“Maxing out HSAs by April 18th is a great way to have a tax-free pool of funds in reserve for medical expenses,” Bronnenkant says. “The HSA is triple-tax-advantaged as the contributions are pre-tax, earnings are tax-deferred, and withdrawals for qualified medical expenses are tax free.” They also roll over from year to year.

If you have some cash to spare, you can potentially reduce your tax liability by maxing out your HSA and increasing your deductions. The 2021 contribution limit for taxpayers covered by a high deductible health plan is $3,600 for single individuals and $7,200 for families. Each spouse who is age 55 or older adds another $1,000 to the contribution limit.

4. Don’t Forget to Claim Unemployment Benefits

Even if you already paid taxes on your unemployment benefits, you need to report those earnings on your tax return.

“Many people forget that they may have collected just one or two checks,” says Tatiana Tsoir, CPA and finance coach. “These still need to be accounted for.”

Failing to report your unemployment income can potentially cause your tax return to be rejected, as your tax return income won’t match your income that’s been reported to the IRS.

5. Check for Simple Mistakes

While online tax prep software can review your return for glaring mistakes, they can’t check for typos. Here’s a list of important questions to ask to make sure your return is in tip-top shape before filing:

• Did you spell your name correctly?
• Is your Social Security number correct?
• Did you enter your employer’s EIN (employer identification number) on your 1099 or W2 correctly on your return?
• Are your calculations correct if you’re filing a paper return?
• Is your bank information (routing and account number) correct?
• Did you sign and date your return if filing by mail?

6. E-File for the Fastest Refund

While you might like the satisfaction of putting that stamp on your tax return, it could delay your refund for months. Adam Wood, co-founder of Revenue Geeks, says your best bet for a speedy refund is to file electronically. Even if you don’t expect a refund, it’s best to e-file for prompt processing of your return.

“Because the IRS is chronically understaffed and has been saddled with coordinating the distribution of Covid-19 stimulus checks, people who filed by paper for 2019 or 2020 may still be waiting for their refunds,” he says. “This year, refunds [for paper returns] could be delayed for months again, especially for those who choose physical checks rather than direct deposit.”

7. Mail Your Return to the Right Address

If you still want to mail your tax return, be sure you’re mailing it to the correct address. You can search for the correct address by return type and your state on the IRS website.

8. Track Your Return and Refund Online

Once you file your return, you don’t have to wonder what happens. You can create an online account with the IRS to track your return and refund status.

There’s an online guide to help you navigate your account setup. Once you’ve created an account, you can log in to see the exact status of your return, any balance you might owe and even sign up to receive notifications when the status of your account changes (such as when your return has been completely processed).

If you simply want to track your refund, visit the IRS Where’s My Refund? tool. To track your refund, you’ll need your Social Security number or taxpayer identification number (TIN), your filing status listed on your return and the exact dollar amount of your refund.

Frequently Asked Questions (FAQs)