The tax deadline is less than three days away, but don't panic. We're here to answer your last-minute questions (including how to get more time to file!). Thanks for joining us! Fire away.
Thanks, Sandy. We're going to get questions (some of which are, naturally, rather specific) but I'd like to check in on a couple of important principles when we're in the home stretch.
Sandy, help people out with the core question: Who needs to make the April 15 deadline? And who doesn't?
If you owe taxes, you need to file by April 15, even if you can't afford to pay. Otherwise, you'll face late-payment and failure-to-file penalties, which can really add up. But if you're due a refund--and that applies to most people--you can buy yourself more time by filing for an extension. As long as you file Form 4868 by April 15, you can delay filing until Oct. 15. You don't have to give a reason; just file the form.
Sandy, got a question for you from Chelsea -- about credit for adoption expenses.
It could. I would refer you to IRS Pub 3402 for more information. And if you don't owe, I would encourage you to file for an extension.
Sandy, here's a questioner who's harking back to what you mentioned when we started.
The deadline for everybody is April 15, and if you don't file, you could be subject to failure to file penalties. It's unlikely that the IRS will come after you if you're due a refund (we've all heard stories about people who haven't filed for years). But why take any chances? File for an extension and you're good to go until October.
This is a complex question that should probably be addressed by a tax professional (I am not a CPA). I found a discussion of this problem on a TurboTax form, which I've linked below (although some of the answer is specific to TurboTax). You clearly don't want to be double taxed, so however you report this income, keep copies of all relevant documents in case you receive a notice from the IRS.
I think TurboTax is the most comprehensive, but you're right: the costs can add up, especially if you have to buy a state tax return (or two). I've test-driven H&R Block@Home in the past (not this year) and found it to be an adequate substitute, although not quite as user-friendly, and it's less expensive. Also, while it may be too late this year, keep an eye out for deals: some brokerage firms offer customers free or discounted versions of TurboTax, for example.
But it's better than nothing, right? If the IRS doesn't receive anything from you--a tax return, recipes, old TV Guides, whatever--you'll want proof that you made the effort. And that's what a return receipt does.
Did you make a lot of charitable contributions? A lot of people lose track of those, and shortchange themselves as a result. Expenses related to your home, such as mortgage interest, property taxes, etc. can significantly reduce your tax bill. And don't ignore receipts for child-related expenses, such as the dependent care credit.
Sandy, we've got a question from a Twitter follower -- so if you have further questions for @budelux I don't know if we'll be able to stay in touch. But, here goes:
File by Monday, even if you can't pay. You'll owe interest and penalties, but you'll avoid the hefty failure-to-file penalty.
Yes, and well, there's proof that e-filing really is the way to go, at least if your goal it get your money back as soon as possible.
Question about the "cobbler's shoes" coming up.
Funny you should ask. I finished up last night. In previous years, I've filed much earlier because a) I reviewed tax software and b) we got a refund.
A question from Proactive (nice one!) that we will probably use to wrap up. Sandy, please help us look ahead...
If you're a high-income taxpayer or have a lot of investment income, yes. There's a new 39.6% tax bracket for taxpayers who make $400K or more $(450L and over for married couples) and new taxes on investment income for taxpayers with modified AGI of $200K or more ($250K for married couples). So it's not too early to start looking at ways to minimize these taxes. For everybody else, the big change is that unreimbursed medical expenses will have to exceed 10% of your AGI before you can deduct them on your 2013 tax return (unless you're 65 or older, in which case it remains at 7.5%).