money Taxes 2022: Last-minute tax filing tips
Tax day is right around the corner and if you haven’t filed yet, putting together your return in a rush may come back to bite you.
“You should never rush through the process of having your tax return prepared because you want to make sure that your tax return is complete and accurate,” Daniel Geltrude, founder of Geltrude & Company, recently told Yahoo Finance Live (video above). “The last thing that you want is you file your tax return in a rush, and then in 30 days you get a nice letter from the IRS saying there was a problem with your tax return.”
If you need more time to file your tax return, you can request for an extension that gives you until October 15 to file your taxes. But you must file your extension request by the April 18 deadline.
If you owe the IRS and need extra time to file your return and to pay, then you need to request an extension to file and an extension to pay. If you owe and only request an extension to file, you may face penalties and interest on the amount you owe.
If you are filing by mail and are waiting until the deadline to pay, a postmark alone may not be sufficient.
“As long as the envelope is properly stamped by the due date — April 18th — sending your check through the mail at that last moment you’re okay," Geltrude said, noting, "you should also do that by certified receipt to make sure that you can prove timely filing and timely payment.”
Geltrude offered some other tips.
Working remotely and the home-office deduction
Due to the pandemic, many people worked from home. Unfortunately, working remotely from home doesn’t mean you qualify for the home-office deduction.
“If you are an employee getting a W-2 for the work that you do, you are not entitled to take those home office deductions as an employee,” Geltrude said. “You need to be an independent contractor having your own business to take all of those expenses related to your business activity as a deduction against your income.”
GoFundMe donations
Many taxpayers generously gave donations to people and businesses during the pandemic through GoFundMe and other crowdfunding platforms. However, for tax purposes, charitable giving must meet IRS requirements.
“When you're talking about giving money to charity, that is supposed to be a charity recognized by the IRS — 501(c)(3) — to get a tax benefit,” Geltrude said. “Whether you itemize your deductions or not, you are able to deduct $300 of charitable giving if you’re single or if you're married filing jointly you can take up to $600.”
Unemployment income is taxable
Before the pandemic, unemployment income was always taxable. You were given the option to have taxes withheld from your unemployment check or pay during tax season.
“Because of the pandemic, in 2020 the federal government said we are not going to be taxing unemployment benefits, but that expired going into 2021,” Geltrude said. “There were people still receiving unemployment benefits last year and didn't consider that it was going to be taxable. Now they go to file their tax return [thinking] a refund, but because unemployment benefits are now taxable could be in for a surprise.”
Ronda is a personal finance senior reporter for Yahoo Money and attorney with experience in law, insurance, education, and government. Follow her on Twitter @writesronda
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