According to TurboTax, New York City is the third worst city in terms of procrastination. I can identify with this; I am one of the world’s worst procrastinators, a level I’ve accomplished through lots of practice. This year, I filed my taxes in the middle of March, the earliest I have ever completed the process. Normally, I file at the last minute like many others in my metropolitan area.
Here are some important tips for those of us who wait until the very last minute, suggested by TurboTax.
“Even procrastinators have things they can do to save money on their taxes. Taxpayers have up until the April 15 deadline to contribute to an IRA.”
I contributed to a Roth IRA for 2008 as a lump sum earlier this year and my SEP IRA just a few weeks ago when I filed my taxes. At the end of 2007, when I normally would have begun initiating my 2008 Roth IRA contributions to begin January 1, 2008, I debated whether to dollar-cost average every month or invest in a lump sum. I decided to take the latter approach, but I didn’t invest until 2009. In retrospect, this was a good decision with prices lower this year. There was no way I would have known that when I made the decision, however.
“Don’t forget charitable contributions made in 2008. Even mileage to and from volunteering is deductible.”
Only those who decline to take the standard deduction and itemize deductions instead can deduct charitable contributions. Many people contributed less to charity in 2008 thanks to the economic recession, but these are times in which charities need the funds and volunteers more than ever.
“Go online. Taxpayers can go online to prepare and e-file taxes up to the 11th hour at www.TurboTax.com, it’s fast, easy and convenient.”
Of course, TurboTax is only one of several choices for filing your taxes online up to the last minute. I used TaxAct this year, and H&R Block is another popular choice. These three options often cost money, but you might qualify for free e-filing.
“E-file. Taxpayers can avoid the long lines at the post office and can get their refund back in as little as 8 days with direct deposit.”
That’s great news if you’re getting a refund. I ended up owing the government a boatload of money this year, including a small penalty for not paying enough in estimated taxes. When you owe money and file online, it’s easy to schedule an electronic check payment for April 15 no matter how early you file.
“Not going to make the April 15 deadline? File for an extension. Taxpayers will get an extra 6 months to file (to October 15, 2009). But remember, an extension to file is NOT an extension to pay taxes. If a taxpayer owes money, they will need to pay their tax bill by April 15, or face penalties.”
Qualifying taxpayers who are purchasing a house between April 15 and October 15 may want to file an extension as well, in order to qualify for the $8,000 first-time homebuyer credit without going through the trouble of filing an amended return or without waiting for filing 2009 tax returns next year.
If you need more time to file, and you believe you’ll owe taxes but you’re not quite sure how much, it might not hurt to pay your best guess on April 15 when you file for an extension. If you determine that you owe more, you will reduce your penally, and if you determine than you owe less, the government will send a refund.
I’m just glad that my taxes are finished. It is one less thing for me to worry about. As a procrastinator, I can freely admit that life is less stressful when you take care of responsibilities initially rather than putting them off to the last minute. And it’s a struggle for me to live up to that goal.
If you were wondering, here is the full list of the top ten cities for tax procrastination, according to TurboTax:
- San Francisco, California
- Houston, Texas
- New York, New York
- Chicago, Illinois
- San Diego, California
- Phoenix, Arizona
- Seattle, Washington
- Los Angeles, California
- Dallas, Texas
- Las Vegas, Nevada