For many tax returners, state and federal income taxes are scheduled for Tuesday.
Congratulations when the 2024 tax effort is over.
If not, last-minute tax return tips from one San Diego Finance Professional and the Internal Revenue Service could cut a bit in the coming days.
Insights from Finance Pro
Levi Anderson, Financial Planning Manager for San Diego Office EP Wealth Advisor, is a fee-only trustee company, and has shared some insights and reminders for those still working on taxes, whether alone or in tax professionals.
If you are filing an extension, you will need to pay your tax balance before the tax deadline on Tuesday, Anderson said. “If you are filing an extension, be aware that even though you are filing an extension, your taxes will be paid at the original tax deadline,” he said. “The ‘Payment Disability’ penalty is less than the ‘File Fail’ penalty, but if you wait for the tax to be paid later, the penalty and interest can be added. “It’s never too late to contribute to your 2024 retirement account. Even if it’s four months from 2025. These contributions can reduce your taxable income. “Last-minute contributions to these accounts could still count towards the 2024 tax year ending April 15th.
IRS resources for last minute filers
For last-minute filers looking for free filing resources, qualified taxpayers can use IRS direct files and IRS free files. “And also, anyone can use IRS-free files to send extensions of file time regardless of income,” the agency said on its website. Link: irs.gov/filing/file-an-extension-through-irs-free-free
The IRS has a searchable FAQ page with almost 60 questions and links to answers, including “You must submit an amended return.” “How can I fix the overcharge deferral to 401(k)?” and a set of payment and distribution questions links called “Is it taxable?”: irs.gov/help/ita
The final IRS tip page also contains information for those who are eligible for auto-expansion and have problems paying tax bills. Link: irs.gov/newsroom/last-minute-filing-tips-resources-abailable-to-help-taxpayers-who still-need-to-file
Avoiding errors
The IRS also shared pointers to minimize the chances of errors in returns.
Make sure your triple check filing status, name, social security number and date of birth are correct. The same can be said for bank accounts and routing numbers when it comes to direct deposit refunds. Answer the digital assets questions regarding Form 1040 and several other forms: “Did you receive (a) (as a) (as a reward, award or payment of property or service), and (b) selling, exchange or disposing of digital assets (or financial profits of digital assets) at any time in the tax year?” Examples of digital assets include convertible cryptocurrencies and cryptocurrencies such as Bitcoin, as well as inappropriate tokens (NFTs). Income from these assets is taxable. Agents also recommend using electronic filing rather than paper filing as a tool to improve accuracy. “Electrofiling reduces mathematical errors and encourages taxpayers to lack information. Electronic applications and direct deposit choices are the fastest and safest ways to get a refund,” the agency says.
Plan ahead
San Diego finance professional Anderson said it’s the perfect time to start taking shape next year’s filing season.
“While reviewing your tax returns, ask if you’re prepared to consider doing something else to be in a better tax position next year,” he said. “You may not be able to do long strategic sessions on the spot, but your tax situation will be refreshing in your preparer’s minds and they may have very useful pointers to consider between now and the end of the year.”
Anderson doesn’t just put his tax returns in the drawer. “The biggest problem we’re seeing is that people won’t think about taxes until this time next year. Most of the tax-savvy moves need to be done by December 31st.”
Original issue: April 14, 2025, 1:26pm EDT
