Tax Tips: Last-Minute Deductions and Credits

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The IRS has started accepting tax returns for the 2020 tax season so if you haven’t started to think about your tax return, get on it.

If you need some incentive, last year 75% of taxpayers received a tax refund of close to $3,000, according to Lisa Greene-Lewis TurboTax (INTU) - Get Report expert and CPA.

And thankfully, there are still some last-minute things you can do to get that tax bill down. So while you’re organizing your documents and going through receipts, don’t forget things like:

  1. The sales tax you paid. If you itemize your deductions, you can choose to deduct your state taxes paid OR your sales tax. If you made a big purchase in 2020, your sales tax may be higher. So check that out.
  2. Points paid points on a refinanced loan or a new one. Those may be deductible too.
  3. All your charitable contributions, even the ones you had deducted from your paycheck, so check your W-2.
  4. Miles your drive to a charitable event. If you drove to a charity event and donated your time or energies, you may be able to deduct 14 cents per mile for the ride.
  5. IRA contributions. You have until you file your return to make a contribution for 2020. That could be $6,000 plus an additional $1,000 if you’re 50 and over. And if you’re self-employed, you have time to make those SEP IRA contributions too.
  6. And if you can’t get your tax return together by April 15, you can file Form 4868 – Application for an Automatic Extension of Time to File. That’ll give you until October 15, 2021, to file your return – no questions asked. Big note though: That is NOT an extension of time to pay your bill. You still owe any taxes due by April 15 or you will be smacked with late penalties and fees.

So be sure to watch the video above for all the details.

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