Last Chance Tax Deduction Tips Before Tax Day
The Taxman should be a Marvel villain. The only thing more certain than death or taxes is getting audited if you don’t file correctly.
And the Taxman doesn’t have to make you aware of the multitude of tax deductions and benefit opportunities out there either.
Here are some last-chance tax deduction tips to consider before tax day.
File Your Tax Return Correctly
Do yourself a favor, don’t wait until the last minute, and rush to fill out your tax return. And make sure that you fill it out correctly. What you must consider is that waiting until the last moment means that your tax return will get processed last.
It is not unusual for the I.R.S. to extend deadlines or postpone tax return deliveries due to unmanageable backlogs. And rushing or filling out your tax return incorrectly is just going to create more unavoidable problems for you.
At best, you may be required to fill out an amended tax return. An amended tax return is just an admission that the original filer made critical mistakes on the original return that rendered it unusable.
An amended return is just going to put more professional scrutiny on your return.
At worst, you could get audited for sending messy, incorrect, or incomprehensible tax returns.
Get a competent tax professional to perform your taxes if needed.
The $300 CARES Act tax Deduction
The Coronavirus Aid, Relief, and Economic Security Act, which is also known as the CARES Act, was ratified in March 2020. The CARES Act is an economic stimulus bill designed to give economic aid to citizens and businesses adversely affected by the pandemic.
Depending on your tax bracket and if you qualify for the standard deduction, which 90% of Americans do, then you can deduct up to $300 via cash donations. The special $300 tax deduction is a feature enabled by the CARES Act.
Qualifying couples and married couples can deduct up to $600 in taxes via cash donations.
Consult with your tax professional to make you are filing taxes in accordance with your tax bracket.
Make IRA Contributions
Consult your tax professional about your IRA or Roth IRA contributions. Depending on your retirement plan details and your income status, your IRA contributions could be tax-deductible.
If you have a Roth IRA, then your qualifying contributions are tax-free if you withdraw during retirement and according to the rules.
The tax return deadline for 2022 is Monday, April 18. If you are under age 50, you can contribute as much as $6,000 to your IRA. And if you are over the age of 50, then you contribute an extra $1,000 in a so-called “catch-up” cash contribution up to $7,000.
Consult Your HR Department
Never assume when it comes to understanding the number of tax deductions or benefits that you may qualify for.
Consult your job’s HR department and inquire about any work-related tax benefits or deductions that suit your circumstances.
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Allen Francis is a full-time writer, prolific comic book investor and author of The Casual’s Guide: Why You Should Get Into Comic Book Investing. Allen holds a BA degree from Marymount Manhattan College. Before becoming a writer Allen was an academic advisor, librarian, and college adjunct for many years. Allen is an advocate of best personal financial practices including saving and investing in your own small business.
