Tax-shrinking tips

Tax season is here. These tips can save you some dollars and hassles:

• Be organized. Maintaining a folder throughout the year for receipts and other tax-related documents can make preparing your return easier.

• Be neat and thorough — and report all your income. You don’t want to trigger an audit. When you get a 1099 form, the IRS gets a copy of it, too, and it will be expecting you to report that income.

• Use tax-advantaged retirement accounts. Contributions to traditional IRAS and 401(k)s will reduce your taxable income, shrinking your tax bill. (Contributions to Roth accounts don’t do that, but they offer tax-free withdrawals later.) The deadline for IRA contributions is the tax deadline of the following year. So it’s actually not too late to make a 2019 IRA contribution — you can do it until April 15, 2020. The limit is $6,000 for both 2019 and 2020, with an extra $1,000 allowed for those 50 and older. Learn more about retirement accounts at fool.com/retirement.

• Take required minimum distributions (RMDS) on time. Once you hit age 72 (or if you turned 70 ½ before 2020), you will need to take annual RMDS from most retirement accounts (though not Roth IRAS, unless you inherited them). Don’t be late, because the penalty is huge — 50% of the amount you should have withdrawn.

• Consider filing your return electronically, using tax software. It can speed up processing, and can also help you identify tax breaks while minimizing math errors.

• Be late filing your return if you have to. Just file for an extension on time, using Form 4868 from Irs.gov. But you still must pay all of what you think you’ll owe by April 15 — or you may get hit with both interest charges and penalties for “failure to pay.”

• Consider hiring a tax pro. Good ones can help you strategize and save money.