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5 Last-Minute Tax Tips

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5 Last-Minute Tax Tips


Time is running out to get those taxes filed. We checked in with Amy McAnarney, executive director of H&R Block's Tax Institute, for a few tips you shouldn't forget in your mad dash to get it done.

1. Push the deadline back. For all those procrastinators who need a bit more time, go ahead and file for an extension if you really need it. And while it'll give you six more months to file, it won't give you more time to pay. If you think you're going to owe the government money, pay 90 percent of the estimated amount by April 15th or you'll get slammed with penalty charges. You can pay the rest by October 15th without penalty, but they will charge you interest until you're paid in full.

2. Sock away some savings. If you contribute to an IRA account before April 15th — the max is $5000 — you'll be in for a bigger tax refund depending on how much you put in. And if you buy a house (even if you don't close on it until June 30th), you'll still be able to take advantage of the homebuyer credit.

3. Get your questions answered. Sure, there's not a lot of time left, but if you've got questions, ask! Whether it's an online expert or calling up a tax company, be sure to get the most credible advice out there. There have been quite a few tax law changes that could affect what you can and can't write off, especially if you went through a period of unemployment last year. Make sure you're getting back every last penny you can.

4. There's more than one way to pay. Most people wait to the last minute, says McAnarney, because they owe money. But if you don't want to wipe out what's in your bank account, there are other ways to do it. Consider taking a loan from your 401(k) because when you pay it back with interest, you're only paying it back to yourself. And don't assume the IRS won't work with you — ask about installment plans.

5. Start planning for next year. While you're focused on filing for 2009, we're already four months into 2010. If you're banking on writing off big-ticket purchases next year, make sure the tax credits will still be available to you.

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