Penny Wasem’s
Last Minute Tax Tips

There's still time to make a positive impact on your return

The tax deadline this year is April 18, 2023, due to April 15 being on a Saturday, and Emancipation Day on Monday, April 17. Still, the deadline is only two weeks away. If you have procrastinated getting that tax return completed, or enjoy the adrenaline rush by waiting until the deadline, there are still potentially some tax savings measures you can take and some tips to help you avoid some mistakes.

Contribute to a Health Savings Account

There is still time to contribute to your H.S.A. For 2022, you can make contributions to your Health Savings Account until April 18, 2023 and designate them for 2022 and deduct them on your 2022 tax return. If you have self-only HDHP (high deductible health plan) coverage, you can contribute up to $3,650. If you have family HDHP coverage, you can contribute up to $7,300. If you are an eligible individual who is age 55 or older at the end of your tax year, your contribution limit is increased by $1,000.

Planning ahead: For 2023, if you have self-only HDHP coverage, you can contribute up to $3,850. If you have family HDHP coverage, you can contribute up to $7,750.

Reminder, amounts withdrawn for medical expenses are tax-free. Any balance remaining at the end of the year can carry forward to future years.

*For eligibility, definitions of HDHP coverage and more information, see IRS Publication 969 or contact your tax professional.

Make an IRA Contribution

Contributing to a traditional or Roth IRA by April 18 is a great way to save for retirement. You can make contributions to your IRA up until April 18, 2023 and designate them for 2022. The IRA contribution limits for the 2022 tax year are $6,000 for individuals under age 50 and $7,000 for those who are 50 or older.

Making a contribution to a traditional IRA can reduce your tax bill. While contributions to Roth IRAs aren’t tax-deductible, they can still help you max out the annual IRS limits for retirement savings.

Note there are several limitations as to the deductibility of contributions to traditional IRAs and income limits for contributing to Roth IRAs. In addition, you and/or your spouse must have earned income to be eligible. Be sure to check with your tax professional or check the IRS.gov site for more details.

Planning ahead: For 2023, the total contributions you make each year to all of your traditional IRAs and Roth IRAs can’t be more than:

$6,500 ($7,500 if you’re age 50 or older), or… If less, your taxable compensation for the year.

Items to check before you submit your return

If you are tired, in a hurry, or filing at the last minute, it’s easy to make simple mistakes.

  • Did you spell your name correctly?
  • Is your Social Security number correct? If e-filing, this will cause a rejection if incorrect.
  • Did you enter your employer’s EIN (employer identification number) on your 1099 or W-2 correctly on your return? This can also cause a rejection if e-filing.
  • Did you check the math? Are your calculations correct if you’re filing a paper return?
  • Is your bank information (routing and account number) correct?
  • Did you sign and date your return if filing by mail?
  • Don’t forget to file your state tax returns as well as school tax and local taxes, if applicable.

Identity Protection Pin (IP PIN)

An Identity Protection PIN (IP PIN) is a six-digit number that prevents someone else from filing a tax return using your Social Security number or Individual Taxpayer Identification Number. The IP PIN is known only to you and the IRS. It helps us verify your identity when you file your electronic or paper tax return.

Important Information about IP PINs

  • An IP PIN is valid for one calendar year.
  • A new IP PIN is generated each year for your account.
  • If you can’t locate your IP PIN for the current year, you can go to irs.gov “Get an IP PIN” tool and it will display your current IP PIN.
  • An IP PIN must be used when filing any federal tax returns during the year including prior year returns.

When will I get my refund?

If you simply want to track your refund, use the IRS Where’s My Refund? Tool at www.irs.gov/refunds. To track your refund, you’ll need the following:

  • Social Security number or taxpayer identification number (TIN)
  • Filing status
  • Refund amount

What if I can’t pay the full amount of my tax balance due?

File your tax return by the due date, even if you can’t pay the full amount of the tax due. That will eliminate the failure to file penalty. Pay what you can with the return. The IRS offers a couple of online payment plan options. Visit www.irs.gov/payments/online-payment-agreement-application to apply.

  • Short-term payment plan
    The payment period is 120 days or less and the total amount owed is less than $100,000 in combined tax, penalties and interest.
  • Long-term payment plan
    The payment period is longer than 120 days, paid in monthly payments, and the amount owed is less than $50,000 in combined tax, penalties and interest.

Once your online application is complete, you’ll receive immediate notification of whether your payment plan has been approved without having to call or write to the IRS. Online payment plans are processed more quickly than requests submitted with electronically filed tax returns, even if the new tax is not yet assessed.

If you haven’t yet filed your return, get busy! Next week, I will talk about filing an extension.

Filed under: Dollars & Sense, Featured, News
Profile photo of Penny Wasem, CPA, CFP, PFS, owner of Lifetime Financial Planning Solutions in Lancaster, Ohio.

By Penny Wasem, CPA, CFP, PFS

Penny L. Wasem is the owner of Lifetime Financial Planning Solutions, LLC. A summa cum laude graduate of Ohio University, Penny earned a Bachelor of Business Administration with focus in accounting and mathematics. She serves on the board of The Fairfield Medical Center Foundation, is a member of the Investment Committee of The Fairfield County Foundation and has been active on many non-profit boards in the community. Penny lives in Lancaster with her husband Eric Hubbard and is parent to Clark and Olivia Hubbard.