If you haven't filed your taxes you're not alone. According to the IRS, 40 percent of people wait until April 15th to file. That's not necessarily a problem. You can still make it by the deadline — or file an extension — particularly if you're willing to put in some time this weekend. But with taxes, as with anything you leave until the last minutes, the worry is that by rushing through, you'll miss something. “Today” financial editor Jean Chatzky has prepared a list of the things you want to be sure that you don't forget to do.
The number one mistake? Confusion over the child credit
The child credit was raised — per child under age 17 — from $600 to $1,000 for 2003. What people do not understand is that they may have already received that money. If you were one of the 25 million people who got a check from the IRS — it ran up to $400 per child — in the summer of 2003 that was an advance on that money. In order to accurately calculate your tax bill, you have to remember to subtract the advance if you received it. So far, the IRS says 1.5 million people haven't done that.
Contribute to an IRA
If you haven't done so already, you can make a contribution of $3,000 for this year to a Roth or Traditional IRA. The Roth IRA is a better way to go for the vast majority of people if you are eligible. If you were 50 years of age or older as of December, 31, 2003, you can contribute an extra $500 — the IRS calls this a catch-up contribution. Roth IRAs aren't tax deductible though the contribution still has to be made by April 14th. You are eligible to deduct your contribution to a traditional IRA if you are not covered by an employer's plan and you meet income requirements you'll find on IRS.gov.
Itemizing may be a bit more work, but it could result in bigger tax savings. Essentially, you just add up your deductible medical expenses, taxes and interest paid, gifts to charity, casualty and theft losses and miscellaneous deductions and compare the total to the standard deduction. If the itemized deductions are greater than the standard deduction, you itemize. But do it carefully. This is where rushing gets people in trouble — they forget itemized deductions they're eligible for. Some to keep in mind: Medical expenses (if they exceeded 7.5 percent of your adjusted gross income), miscellaneous expenses (that exceed 2.0 percent of your AGI), state income taxes paid in 2003. If you refinanced your mortgage again in 2003 (it doesn't matter in what year you refinanced), you can deduct points paid on your prior refinance on this year's return. Don't forget the fair market value of all of those in-kind donations you made — the items you put in the goodwill box or gave to the church rummage sale. They can add up to hundreds of dollars a year. It's best if you have receipts, but for donations of less than $250 in value you don't need one.
Dot your I's, cross your T's
According to the IRS, many of the mistakes made are simple ones. So be sure to put all required social security numbers on your return (they're not on the label), and not just for you but for spouses and dependents (children and elders) you're listing in order to take the child credits or earned income tax credits. Social security numbers that are missing, incorrect or illegible can delay or reduce your refund. Also double check your math, sign and date your form (both spouses must do this if filing jointly, even if you only had one income), and attach all required schedules.
E-file and Direct Deposit
Over 60 percent of Americans can E-file for free. You'll find instructions at IRS.gov. If you are owed a refund, be sure to elect to have it directly deposited into your bank account — that'll get the money into your hands in 10 days. Going the old fashioned route can take 6 weeks. However, if you are going to send your form by mail, you may use the US Postal Service or one of four private carriers designated by the IRS — Federal Express, Airborne, United Parcel Service or DHL Worldwide Express.
If you're not going to make it, ask for an extension
The IRS will grant anyone who files form 4868 an automatic extension of 4 months to file their return. You can also request an extension over the phone by calling 1-888-796-1074. (If you're self employed and have a self-funded retirement plan like a SEP or a Keogh, filing form 4868 also gives you another 4 months to make your 2003 contribution.) But note, an extension to file is not an extension to pay. If you know you owe the IRS money, rather than the other way around, it the onus is on you to make a payment at this time. And you have to pay 90 percent of what you owe or face interest and penalties, which means running a rough calculation (experts say you'll be pretty safe paying what you owed last year.) If the IRS owes you money, understand that although you have a 4 month extension, you won't want to use all that time. You'll want to file as soon as possible and get your money back rather than giving it to Uncle Sam in the form of an interest free loan.
If you can't pay, file anyway. There are penalties for not paying — but the ones for not filing are substantially higher.
Jean Chatzky is the financial editor for “Today,” editor-at-large at Money magazine and the author of “Talking Money: Everything You Need to Know About Your Finances and Your Future.” Copyright © 2004. For more information, go to her Web site, .