1. Personal Income Tax Guide: Introduction
  2. Personal Income Tax Guide: Basic Concepts
  3. Personal Income Tax Guide: Documentation And Records
  4. Personal Income Tax Guide: Moves To Make Before December 31
  5. Personal Income Tax Guide: Moves To Make Before April 15
  6. Personal Income Tax Guide: 6 Overlooked Deductions And Credits
  7. Personal Income Tax Guide: Common Filing Mistakes
  8. Personal Income Tax Guide: Avoiding Nasty Surprises
  9. Personal Income Tax Guide: Conclusion

By Ken Clark

The only real significant tax saving move a taxpayer can make after December 31 but prior to filing, is contributing to a traditional individual retirement account (IRA). For many taxpayers who find out they're going to otherwise owe, the April 15 IRA contribution deadline allows them to at least partially offset their taxable income by setting aside money for retirement in a traditional deductible IRA. (For more, see Tax-Saving Advice For IRA Holders.)

That's not to say that the only people setting aside money for the future should be people who are trying to dodge a tax bullet. Non-deductible Roth IRAs and Coverdell Education Savings Accounts (ESAs) also have an April 15 funding deadline. Since both of these accounts have unique time limits that affect their eventual taxability, having your contributions count for the prior tax year is still a plus.

Track Down Your Missing Paperwork
Unfortunately, some of the most important information you need to file your tax return comes from beyond your control - the third parties that have the information you need. Whether it is a late or missing W-2, Form 1099-R or K-1, you cannot properly file your taxes without knowing the exact dollar amounts that are on those forms. Since the IRS uses their computer system to automatically match up the information these companies submit with what you report on your tax return, supplying your "best guess" can easily result in an audit. (To find out why you really should avoid an audit, read Surviving The IRS Audit and Avoiding An Audit.)

Generally, if you haven't received these documents by January 31, you need to take the initiative to track them down before April 15. For starters, try going online - many employers and most financial institutions now provide electronic versions of these documents that you can print or download straight into your tax preparation software.

Don't forget about your "deductible" forms either, such as the Form 1098. These forms, which many taxpayers may not realize they're missing until they're sitting across from their accountant, document how much deductible interest you've paid on things like your mortgage or student loans. (To learn more, see The Mortgage Interest Deduction.)

Make a January 15 Quarterly Estimated Payment
Many self-employed taxpayers, as well as certain people meeting other requirements, are required to make quarterly estimated payments to the IRS throughout the year. These payments are meant to take the place of the withholding that would normally be subtracted from a paycheck if they were an employee of someone else.

Naturally, in the rush of one year's end and another's beginning, it's easy to forget that the estimated payment for October through December is due January 15. Failing to make this payment by that date can result in steep penalties and interest.

Note: Taxpayers who file their previous year's return by the beginning of February, as well as paying the entire balance due, are exempted from having to make a January 15 estimated payment.

Personal Income Tax Guide: 6 Overlooked Deductions And Credits

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