Filing Taxes Last-Minute? Here’s How to Get Organized Fast
This article is sponsored by TaxAct.
Tax Day is just over a week away, and if you haven’t filed your taxes yet, you might be wondering how you’re going to get everything done before the deadline. If you haven’t even started with your taxes — like, your W2 is still in that stack of mail on the counter, and you took on a few freelance gigs that you’re not sure how to report — it’s time to turn your tax-related anxiety into a plan of action.
I’m no accountant (just a freelancer who’s learned a lot about taxes over the past six years) so please refer to a CPA if you’re looking for substantive tax advice. However, if you’re hoping for a few tips to help you get moving on your taxes, here’s what I recommend:
Make a list of everyone who paid you this year — and how much.
Some of us only have to report a single source of income on our taxes — in which case you’ll only have to dig up the W2 you received from your employer — but if you changed jobs this year, picked up a side hustle, or dipped your toes into freelancing, you’re going to have to remind yourself of all the different ways you got paid.
Here’s the easiest way I’ve found to get this done: pull up your bank account, sort the transactions by “deposits,” and review every penny that entered your bank account over the past year. If you have multiple bank accounts, or if you receive payments through services like PayPal, you’ll want to review those transactions as well. It’s one of the quickest ways to capture how much money came in and where it all came from — I like to put all of my earned income in a spreadsheet and then sort the sheet by client, for example.
Don’t forget about interest, unemployment compensation, and other types of income.
You have to report additional income beyond your salary/wages/freelance paychecks: interest, unemployment compensation, IRA distributions, alimony, basically anything on lines 7–21 of the 1040. Sometimes it’s easy to report this income (your bank sends you a document detailing your taxable interest, for example) and sometimes it might take a bit of tracking on your part — so don’t overlook it!
Yes, you’ll need to file a Schedule C for your freelance side hustle.
If you earned income as an independent contractor, you need to report it on a Schedule C — even if it’s “just a side hustle.” (If you have a few unrelated side hustles, you might need to report them on separate Schedule Cs.) As you’re tracking your income sources and expenses, keep all of your freelance activity on its own piece of paper or spreadsheet so you can report it separately from your W2 income and other personal deductions.
Don’t worry if you can’t find all of your 1099s.
If you do a lot of freelancing, you probably have at least one missing 1099 form. Maybe you recently moved and a client sent the form to the wrong address, or maybe the client recently changed accounting systems and something got overlooked. If you think a client forgot to mail you a 1099, ask them if they can send over an electronic copy — but don’t let a missing 1099 derail your plan to file taxes on time. Include the income in your gross receipts so it gets counted for your taxes.
If you have business expenses, start tallying ’em up.
If you’re a small business owner, sole proprietor, or freelance side hustler, you probably have business expenses that you can deduct from your taxable income. If you didn’t keep very good track of your business expenses this year, open up your bank/PayPal/credit card accounts and do the reverse of the whole “review every deposit” thing — this time, you’ll review every expense and copy the business expenses onto a spreadsheet.
TaxAct’s Deduction Maximizer is a great way to remind yourself of what counts as a business expense — and once you get this year’s expenses sorted, it’s time to learn how to easily track your business expenses for next year.
Did you forget to send out a 1099? File an extension.
As you review your business expenses, you might realize that you paid an independent contractor $600 (or more) in the past year — which means you owe them a 1099. Whoops! I forgot to send a designer a 1099 this year, so these kinds of mistakes happen to everybody. Since it’s so close to tax time, you’ll want to call the IRS and ask whether it’s still possible to file Form 8809, “Application for Extension of Time To File Information Returns.” If you’ve never filed a 1099 before, you’ll also probably want to ask how to do it! (There are multiple forms involved. Just call the IRS and they’ll take you through the process.)
Keep track of your above-the-line deductions.
Above-the-line deductions are those big deductions that get taken out of your income to help you calculate your adjusted gross income for tax purposes (you’ll find them on lines 23–35 of the 1040). They include items like education expenses and property sales. If you’re using a tax software to file your taxes, they’ll take care of calculating some of the above-the-line deductions for you, such as the deductible part of your self employment tax. However, you’ll need to keep track of other above-the-line deductions, such as health savings account contributions, so that you can report your numbers accurately, minimize your AGI, and maximize your refund.
Take the standard deduction.
If you’re in a hurry and you just want to get your taxes filed before the deadline, it might not be worth your time to sort through your potential itemized deductions and compare them to the standard deduction. It’s important to file your taxes by the deadline to avoid any late filing fees or late payment penalties. So if it’ll take you too long to itemize, it’s better to simply claim the standard deduction.
If you itemized in previous years — or if you had a major itemizable expense this year, such as an unexpected medical expense that you paid out of pocket — it’s likely more beneficial to itemize if you have enough time. Choose what’s best for your current situation.
Remember: you can always file for an extension.
If these tips have only made you feel more anxious, remember that you can always file Form 4868 to get an extension on your taxes. I requested an extension early in my freelance career, when I realized I had no idea how to report my freelance income on my taxes, and everything turned out fine. Just remember, filing an extension doesn’t give you extra time to pay your tax bill. That’s still due by the filing deadline. So, if you don’t pay your estimated taxes by April 17, you’ll pay a penalty, but you’ll also get a few more months to make sure you’re tracking, reporting, and itemizing everything correctly. You’ll just need to decide which route is better for you. And if you decide to file an extension, you can do so for free using TaxAct.
What other advice do you have for last-minute tax filers? Share your thoughts — and your tips — in the comments.
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