Haven't filed taxes yet? Read this first

NEED TO KNOW
  • You can still reduce your 2012 taxable income
  • Watch out for numerous scams preying on late filers
Tax

It’s coming down to the wire if you haven’t filed your tax returns yet. The deadline is Monday. But there are still some things you can do to improve your tax situation and protect yourself from fraud.

Reduce your taxable income. You have until April 15 to make contributions to an IRA for 2012. The annual limit is $5,000 for individuals, $6,000 if you’re age 50 or older, subject to income restrictions.

Avoid scams. Every year, the IRS releases its list of the "Dirty Dozen" tax scams. The top three are of particular concern for late filers.

  • Identity theft: This can wreak havoc on your finances, delaying your return for a year or more. Remember this for next year: the best ways to avoid it are to file early and reduce your withholding at work so you don’t get a refund. For now, you can fill out IRS Form 8821. It won’t stop someone from stealing your identity, but it will trigger correspondence from the IRS if someone files a false return using your name and/or address.
  • Phishing: Speaking of correspondence from the IRS, the agency spells it out quite clearly: “The IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels.” In other words, if you get an email or text claiming to be from the IRS, it’s almost certainly a phishing scam. Even if it has an authentic-looking logo, don’t be fooled. Clicking on links can lead to theft of your personal information. The IRS asks taxpayers to send any suspicious communications to phishing@irs.gov.
  • Tax preparer fraud: If you’re rushing to get your return done, you could be vulnerable to an unscrupulous tax preparer. The IRS says every paid preparer must have a Preparer Tax Identification Number. It’s a red flag if the preparer won’t sign your return or include that number. Beware also of preparers who charge a percentage of your refund as their fee, add unnecessary forms to your return, or won’t give you a copy.

What if you owe tax but can’t pay? File your return anyway. The penalty for not filing is far more severe than the penalty for not paying. You can use Form 9465 to propose a payment plan to the IRS. Or, you can file for an extension, using Form 4868.

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