Some of us get our taxes done early and cross it off our to-do list. However, there is a sizable number of procrastinators out there who wait until the 11th hour (sometimes literally) to file their taxes. With the major changes due to the Tax Cuts and Jobs Act, waiting this year is even a bigger mistake than ever. Nevertheless, we have your back with some last-minute tips on how taxpayers can determine their obligations.
Seven quick tips
Tax experts at U.S. News and World Report have come up with some excellent last-minute tips:
- Contribute to the health savings account: This is one of the few deductions you can take after the end of the calendar year.
- Contribute to the retirement account: This can also be done after the end of the calendar year.
- Do not forget child care and dependent care costs: Parents can claim 35 percent of their costs for care, which includes babysitting.
- Itemize deductions: Standard deductions doubled, but there are still opportunities to deduct medical expenses, eyeglasses, mortgage interest, and other things.
- Write off business expenses for a side hustle: This includes mileage on your car while driving for Uber or home expenses if you do Airbnb.
- Claim the qualified business income deductions when possible: Small business owners need to look at this, which is new for 2018.
- Check to see if you qualify for Lifetime Learning Credit: This is the most flexible of tax credits that apply to higher education classes.
Also remember, that the IRS has lowered the threshold for penalty waivers for underpaying from the usual 90 percent of the correct amount to 80 percent, so there is some wiggle room if only for this year.
And if there is a dispute…
This new tax system is complicated, so there are going to be mistakes. If the IRS does send out a letter, taxpayers do have the option to dispute the numbers. An experienced tax law attorney will be a tremendous help in resolving these issues and can often find reasonable solutions.