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Five last-minute tax tips
Follow these suggestions to save time-and maybe even money.
You have just over a week to get those taxes turned in. Accounting professor Dennis Raible at Philadelphia's Saint Joseph's University, also a retired IRS revenue agent, offers these tips:
1.Take advantage of free e-filing. If you're eligible, you can file online through the IRS at no cost. For information on e-filing and eligibility, visit www.irs.gov/efile.
2. File an extension. If you can't get the necessary paperwork in by April 15, at least file an extension by that date. Otherwise you could face penalties. But be aware of what you're actually requesting. "By filing an extension, you're extending your time to file your return, not pay your tax," Raible explains. That means you should estimate your tax and pay that amount by April 15. An extension grants you until October 15 to get all of the paperwork together.
3. If needed, arrange for a payment plan. If you owe the IRS money and can't afford to make a lump sum payment, arrange monthly installments. But be aware that this option could carry interest and penalties, Raible warns.
4. Deduct $500 for real estate taxes. If you claim the standard deduction rather than itemizing, you have a new real estate provision this year. A single person paying state and local real estate taxes is eligible to increase his or her standard deduction up to $500. Married couples can add up to $1,000.
5. Claim that tuition. The cost of qualified tuition can be claimed up to $4,000, and interest from student loans can be claimed up to $2,500. Both tax provisions have income thresholds.
