4 Last-Minute Tax Tips
Get organized now.
Ahh, April. The birds are singing, the trees are budding, and…taxes are due.
If you haven’t filed yet…get moving! And get organized, even if you are going to a tax professional. “If someone comes in with a bunch of papers mixed up in a shoebox, it will take longer to sort out,” says Karen Staples, a certified public accountant and director at RBT, an accounting firm with offices in Newburgh and Poughkeepsie. And the longer it takes them, the more it will cost you, as the fee is based on the complexity of the return and the time needed to prepare it.
Staples and Glenn Noakes, a tax supervisor at RBT’s Poughkeepsie office, say there are no big changes this year for the standard filer, but there are some things you should know.
- Accuracy matters, especially regarding the American Opportunity and Lifetime Learning tax credits or the child tax credit: If you take those credits incorrectly, you can’t claim it again for 10 years, which could lead to a loss of $10,000 or more in tax credits.
- Don’t be afraid to claim everything you are eligible for — with this caveat: “You must be careful and make sure that you know the rules, and that you are truly eligible,” Noakes says. “There are clearly differences between what a freelance person and an employee can claim. For example, an employee cannot deduct commuting from home to their regular workplace, when a freelance or self-employed person may be able to deduct more work-related miles. Remember that any business-related expense must be ordinary and necessary to be eligible for a tax-related deduction.”
- Even if your income is below the threshold that requires a return to be filed, you should file — especially if you’re eligible for education credits, or if you’re a senior homeowner who could benefit from the enhanced STAR exemption. “If you don’t file, you’re not going to see those benefits,” Noakes says.
- Make sure you get, and keep, a copy of your filed tax return. Staples says the general rule is keeping returns for seven years. Noakes goes a step further: “I recommend that all taxpayers keep their tax returns forever,” he advises. “I have witnessed both the federal and state governments requesting tax returns from taxpayers from more than 15 years ago. Your copy of the return may be the only evidence that a return was ever prepared. If no return was ever filed, then the statute of limitations never expires and the government can assess tax and penalties for those years.”