Invest

how to invest

Live

career, food, travel

Save

saving, credit, debt

Protect

insurance, security

Retire

401K, IRA, FI, Retire

Home » Taxes

Your Guide to 2013 Tax Return Domination

Last updated by on 6 Comments

I just received my W2, and now it’s a waiting game for the rest of those 1099’s (is it just me or do they seem to be coming slower every year now?).

I aim to file my 2013 return by the end of February, but to get from here to there, it’s going to require a bit of motivation.

I’m sure you’re in the same boat. So what follows is a Cliff Notes style overview of the noteworthy things you’ll need to get a great start on your 2013 return.

When is the Tax Deadline?

2013 tax return guideThe 2014 tax deadline (for your 2013 calendar year taxes) is Monday, April 15th – no weekend or holiday extensions this year

The deadline is the day you must have your return to the IRS postmarked or e-filed.

When can I Start Filing my 2013 Taxes?

The start date for filing has already passed, and the IRS began processing returns on January 31. However, I know that I am still missing a lot of 1099 and other tax forms, and I am guessing you are too. I prefer waiting until the end of February before filing, so I don’t have to make any amendments for late paperwork.

However, you might not want to wait too long. E-file tax identity theft fraud is on the rise and to help yourself avoid it, you need to beat scammers to filing a return in your name. The longer you wait to file a return, the greater the chance there is that you could face identity theft.

What if I Need to File an Extension?

If you won’t finish your return and  an extension past the tax deadline, you must file IRS Form 4868 by April 15 as well. The deadline for extended tax filing is October 15, 2014 (an additional 6 months). Note that you still must submit estimated taxes due (if you owe) by April 15, and then submit any revisions and your return by October 15.

Is it Too Late to Lower my Tax Liability?

While you can no longer make charitable contributions or contribute to employer-sponsored tax advantaged accounts like 401K’s for 2013, there are still a few things you can do to lower your 2013 tax liability.

If you contribute to a traditional IRA, Keogh, HSA, or SEP IRA, it is considered tax-deductible since you’ve already paid taxes on that income and you will pay taxes at the time of withdrawal. You can contribute until the tax deadline. Doing so will lower your overall adjusted gross income (AGI) and potentially bring you a bigger return or cut the taxes you owe.

Make sure to confirm you are eligible to make this contribution by reviewing the Traditional IRA income phaseout limits for deductions for 2013.

If your income is low enough, you might also qualify for the Saver’s Credit for contributing to a retirement account.

Itemize or Take the Standard Deduction?

Unless you’re 100% sure, you should run the numbers to see if itemizing deductions makes sense versus simply taking the easy standard deduction. Standard deductions for 2013 are as follows:

  • $6,100 for single filers & married filing separately
  • $12,200 for married filers
  • $8,950 for head of household
  • $1,000 for dependents

If your itemized deductions don’t surpass those levels, the standard deduction is the way to go.

The upside of itemizing could be big and even put you in to a lower 2013 tax bracket so that some of your income isn’t taxed at the higher rate.

If you did any of the following during 2013, it could impact your return:

  • Make home energy efficiency improvements? You could qualify for a 2013 energy tax credit. By the way, the coverage for more items like windows, doors, furnaces, etc. was restored for 2013 as part of the fiscal cliff deal.
  • Have self-employment income? You may be able to deduct business related expenses and your home office.
  • Make charitable tax donations? You can deduct them.
  • Have a child this year or act as guardian for at least half a year? You could claim a child tax credit.
  • Have out-of-pocket expenses for medical purposes? Deductible, beyond a certain threshold.
  • Pay tuition or have other education related expenses? There are education tax credits.
  • Contribute to an HSA outside of payroll? Deductible.
  • Pay interest on mortgage or property tax? Both deductible.

E-Filing: The Only Way to File

Last year, 122,515,000 of 148,035,000 (82.7%) of returns were e-filed. It’s the safer, quicker, more reliable route to go.

I’ve used both Turbotax and H&R Block to efile in the past, and they are equally great products (I do like H&R Block a bit more for their charitable donation and audit support).

Both companies offer a free 1040-EZ federal e-file version if you meet certain requirements (For Turbotax: $30,000 or less, $58,000 or less for active military, or to those who are eligible for the Earned Income Tax Credit. For H&R Block, your AGI must be $58,000 or less and you must be age 52 or less to qualify). State returns require additional fees.

If you don’t meet one of those requirements, you’ll probably want to opt for a paid online edition that best suits your needs.

After Filing, Adjust your Withholding Allowances

It looks like Tax Refund Windfall Syndrome got the best of us once again!

The average tax refund last year was $2,755.

This means that Uncle Sam received an average of $2,755 in interest-free loans from 109,563,000 lenders (aka taxpayers), for a combined $301.86 billion.

If you keep getting huge returns, you may need to make some changes to your withholding tax allowances through your payroll department.

A better goal would be to have a slight amount due back to the government, without having to pay a penalty. That way, you’re the one getting the interest-free loan.

If you Get Antsy, You can Check your Tax Refund Status

If, after submitting your return you grow a little impatient, you can check on your tax refund status. The IRS claims that, “more than nine in ten” applicable e-filed returns will receive refunds in less than 21 days.

Beware of scams – the IRS never will send you an email with this option, so go to www.irs.gov and click ‘where’s my refund‘.

Tax Tips from Readers

A few weeks ago I gave away 5 H&R Block key codes to readers who offered tax tips and stories in the comments. Here are some good ones to inspire:

From Sarah:

“Utilize the sub-folders in your inbox. I use gmail, and create new tax, donation, medical folders every year (old ones get archived). I also scan receipts, and email them to myself ASAP so I don’t have to worry about them later. Everything you need is ready for you come tax season..”

From Syed:

“f you do end up getting a refund, apply most, if not all of it, towards a debt payoff or savings goal. You already survived without that money, so use it to your fullest advantage”

From Michael:

“Another great tax tip is to fully utilize a Roth IRA. A lot of people don’t know that you can withdraw contributions made to a Roth IRA without penalty/fee, and for any reason whatsoever. You can also withdraw your earnings/interest if a few things apply, such as college expenses. I opened one up in college and utilized it for just that. Great way for me to get money invested in the stock market and have it double as an emergency fund!”

From Robert:

“Right after I file for the previous year I make a folder for the next year so i have somewhere to store my tax documents so i don’t misplace them. Sounds simple but it saves time later in the year looking for receipts etc.”

From Greg:

“I always try to estimate my taxes at the end of each year to make sure that I have paid enough to the IRS during the year. If I think I am going to come up short, I can make a last minute estimated tax payment to avoid penalties and interest. I have gotten better at this as time has gone on, but it can really help save some serious $$.”

Have fun!

2013 Tax Return Discussion:

  • Have you started or finished your 2013 tax return yet?
  • What are you dreading or looking forward to with your 2013 taxes?
  • What tax tips do you have for the 2013 tax year?

About the Author
I am G.E. Miller, & this is my story. My goal is financial independence ASAP. If you share that goal, join me & 7,500+ others by getting FREE email updates. You'll also find every post by category & every post in order.


6 Comments »
SPEAK YOUR MIND

Enter your:


Home | Sitemap | Terms | © 20somethingfinance.com