Tax return headaches: there are ways to make filing less of a chore

It's that time of year again … The tax return deadline is 18 April. Photograph: -Oxford-/Getty Images

If ever there was a season for procrastinating, this is it. Tax filing deadline is almost upon us and a nation's thoughts turn to sorting out those gutters, cleaning the windows, regrouting the bathroom – anything except filing their taxes.

How bad is it? Well, 35% of us would rather explain the birds and the bees to our children and 13% would rather spend a night in jail than deal with our taxes, according to a WalletHub survey.

The IRS itself has calculated our dread of sitting down to confront the task of preparing our tax returns is so great that as many as 25% of Americans may wait until the last two weeks before the usual 15 April deadline to even begin. (This year, we get a few days' grace: the deadline is 18 April, since 18 April is a holiday in Washington DC.)

Is there something else we can do other than panic and hide under the duvet?

First of all, says Rande Spiegelman, vice-president of financial planning at the Schwab Center for Financial Research in San Francisco, in at least one quirky way, being a procrastinator may have helped you, if you plan to file using a tax preparation software program like TurboTax.

"The obsessive-compulsive types may have tripped themselves up, because it wouldn't have been possible to download the 1099 forms directly into your software until March; they would have been told the information wasn't available yet," he says. That's because investment firms have been given more time to provide their clients with information about dividend income and capital gains, to be sure all that data is correct. "So, unless you really want to do everything by hand, if you've got investment income, you might just as well sit back and wait."

This year, you get another bonus. Given that it's an election year, and few politicians campaigning to hold on to their seats want to propose changes to the tax law, there haven't been many major changes to any of the tax forms, Spiegelman points out. That means that if you're doing your own taxes, you won't encounter many radical changes to the process, unless your own financial position has altered significantly.

That said, the last-minute rush to get your taxes filed raises the risk that you'll overlook something. Some of these glitches can be incredibly obvious (failing to sign on one of the several dotted lines) or items that are easy to miss even when you've got a lot of free time to devote to the task.

While Spiegelmann notes that the last major revision to the tax code back in 1986 closed most of the loopholes and left Americans without a lot of secret, hidden tax deductions to unearth, there still are plenty of smaller chances to claim a deduction against your income here or there that people tend to forget about.

• A case in point is a little-known benefit that gives low-income households a tax break of up to 50% for opening a retirement savings account and contributing as little as $2,000.

• Nearly everyone realizes that they can deduct their charitable gifts when they write a check to a not-for-profit organization, as long as they are itemizing those deductions on Schedule A of their federal form 1040 and provided that they have receipts. A growing number of Americans also understand that they can donate assets – anything from second-hand household items to stock that has appreciated in value – and get a tax benefit from that as well.

Receipts: a stack of these could come in handy. Photograph: Alamy

• Avid volunteers have a small, but potentially useful additional tax deduction available to them that they risk overlooking. You don't get to deduct the value of your time, but if you spent last Thanksgiving in your car, ferrying turkeys and apple pies from donors to food pantries, congratulations: you can deduct all that mileage (and any other related travel costs). If you sit on the board of a not-for-profit organization, and traveled to attend a meeting, or do other work on its behalf, you can deduct your airfare, meals and hotel expenses.

• Similarly, most parents know that they can claim some childcare expenses as a tax deduction at the end of the year. But summer camp? Isn't that just a fun experience? Not if it's a day camp rather than a sleep-away camp, the IRS has ruled. Depending on other circumstances – your income, for instance, and how you're paying for it (you don't qualify if you're using funds from a flexible spending account, which already are free of tax) – a percentage of the costs for children 13 and under can be deductible.

• Are you taking college classes? Even if you aren't enrolled in a degree program and just taking one or two classes, or supporting a student taking one or two courses, if your income is less than $65,000 you could get a deduction worth up to $2,000. If you're enrolled in a degree program, the deduction could be as much as $2,500.

There also are some traps about reporting income, however. The advent of the sharing economy has made this particularly tricky. If you're renting out your apartment on Airbnb and had guests in your spare bedroom for 39 nights last year, brace yourself for some bad news. Anything more than 14 nights crosses the threshold into reportable income, and – worse still – you should have begun reporting that income and paying taxes on it quarterly.

As we shift into a gig economy, in which even full-time, salaried employees can have a dual identity as part-timers selling their crafts on Etsy or driving for Uber, it's inevitable that some late filers will encounter unpleasant shocks like this when they try to put together their 2015 returns. At this stage, there's nothing much to be done but try to pull together as many receipts documenting expenses incurred to generate that income (the cost of the fabric you need to make the quilts that you're selling on Etsy, for instance) and be better prepared next year.

One of the worst positions to be in at this stage of the game is to know that you need more help than TurboTax or H&R Block can provide, and to try to find an accountant in March. You'd have better luck hunting for a pot of gold underneath a rainbow: every accountant in the country is already working 18 hours a day with their existing clients, and won't have a moment to draw breath until early May (after tax day, and a brief holiday in which to regain their sanity). If you're lucky and have friends who are willing to vouch for you with their accountant, a CPA may be willing to spend a few minutes walking through your position with you for long enough to file an extension on your behalf, but that's it.

If you have tried word of mouth and can't find an accountant, try the professional society for CPAs for the state that you live in. "Their websites typically will have a search feature that will help you figure out which accountants are auditors, which ones work for small companies, and which ones do what you want, which is work with individuals on their taxes," says Spiegelman.

Should procrastination lead you to file for an extension, giving you an extra six months to file your return, remember that doesn't give you an extra six months to pay your taxes. If you owe money, penalties and interest will start piling up effective 15 April on any unpaid balances, so if you can't figure out the details of a return because you haven't left yourself enough time, it's in your own best interests to at least guesstimate how much you'll owe the IRS.

And if it looks as if it will be a lot, well, you also have until tax day to reduce your overall tax burden by putting more money into your retirement account. Call that a double win: you pay less tax now, and have more money waiting for you down the road when you need it later – the ultimate anti-procrastination strategy.

Source: Tax return headaches: there are ways to make filing less of a chore