Tax Tips: Year-round tax planning tips for taxpayers
Here are some simple things taxpayers can do throughout the year to make next filing season less stressful.
Organize tax records. Create a system that keeps all important information together. Taxpayers can use a software program for electronic recordkeeping or store paper documents in clearly labeled folders. They should add tax records to their files as they receive them. Organized records will make tax return preparation easier and may help taxpayers discover overlooked deductions or credits.
Identify filing status. A taxpayer's filing status determines their filing requirements, standard deduction, eligibility for certain credits and the correct amount of tax they should pay. If more than one filing status applies to a taxpayer, they can get help choosing the best one for their tax situation with the IRS’s Interactive Tax Assistant, What is my filing status? Changes in family life — marriage, divorce, birth and death — may affect a person's tax situation, including their filing status and eligibility for certain tax credits and deductions.
Understand adjusted gross income (AGI). AGI and tax rate are important factors in figuring taxes. AGI is the taxpayer's income from all sources minus any adjustments. Generally, the higher a taxpayer's AGI, the higher their tax rate and the more tax they pay. Tax planning can include making changes during the year that lower a taxpayer's AGI.
Check withholding. Since federal taxes operate on a pay-as-you-go basis, taxpayers need to pay most of their tax as they earn income. Taxpayers should check that they're withholding enough from their pay to cover their taxes owed, especially if their personal or financial situations change during the year. To check withholding, taxpayers can use the IRS Tax Withholding Estimator. If they want to change their tax withholding, taxpayers should provide their employer with an updated Form W-4.
Make address and name changes. Taxpayers should notify the United States Postal Service, employers and the IRS of any address change. To officially change a mailing address with the IRS, taxpayers must compete Form 8822, Change of Address, and mail it to the correct address for their area. For detailed instructions, see page 2 of the form. Report any name change to the Social Security Administration. Making these changes as soon as possible will help make filing their tax return easier.
Save for retirement. Saving for retirement can also lower a taxpayer's AGI. Certain contributions to a retirement plan at work and to a traditional IRA may also reduce taxable income.
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Tax Tips: IRS has options to help taxpayers who missed the filing deadline
The Internal Revenue Service today highlighted several resources to help taxpayers who missed the April 2025 federal income tax return filing deadline and owe taxes, interest and penalties.
Taxpayers who owe taxes should file their tax return and pay as soon as they can. Interest and penalties will continue to accrue on the owed taxes until the balance is paid in full. Even if a taxpayer cannot afford to immediately pay the full amount of taxes owed, they should still file a tax return and pay as much as possible.
Online payment options
Individuals can pay taxes owed securely through IRS Online Account, IRS Direct Pay, The Electronic Federal Tax Payment System (EFTPS), debit/credit card or digital wallet. Taxpayers may also apply online for a payment plan, including installment agreements.
Those who pay electronically get immediate confirmation after submitting payment. Direct Pay and the EFTPS allow taxpayers to receive payment email notifications. For additional payment information visit Make a Payment.
Having trouble paying? IRS has options to help
Taxpayers that are unable to pay in full by the tax deadline should still file their tax return, pay what they can and explore a variety of payment options available for the remaining balance. The IRS offers Help for Those with Tax Debt, including Applying Online for a Payment Plan. Taxpayers can receive an immediate response of payment plan acceptance or denial without having to call or write the IRS to check their application status.
Online payment plan options include:
• Short-term payment plan – The total balance owed is less than $100,000 in combined tax, penalties and interest. Additional time of up to 180 days to pay the balance in full.
• Long-term payment plan – The total balance owed is less than $50,000 in combined tax, penalties and interest. Pay in monthly payments for up to 72 months. Payments may be set up using direct debit (automatic bank withdraw), which eliminates the need to send in a payment each month, saving postage costs and reducing the chance of default.
Though interest and late-payment penalties continue to accrue on any unpaid taxes after April 15, the failure to pay penalty is cut in half while an installment agreement is in effect. Visit Additional Information on Payment Plans for details on payment plan costs and benefits.
Requesting penalty relief
When taxpayers receive a penalty notice from the IRS, they should read it carefully and follow the instructions for requesting relief. Taxpayers who have filed and paid their taxes on time and have not been assessed any penalties for the past three years, generally qualify to have the penalty abated. Visit Administrative Penalty Relief to learn more about first time penalty relief and other administrative waivers.
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Scammers don't take a break during the summer months, don't let them prey on your identity. Now is a great time to protect your family by registering for an Identity Protection Pin. An IP PIN is a six-digit number that prevents someone else from filing a tax return using your SSN or ITIN. The IP PIN is known only to you and the IRS and helps verify your identity when you file your electronic or paper tax return. ow.ly/s2gQ50W6cJk
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