Six Things You Should Know About Filing Taxes This Year
Filing taxes can be challenging to understand for something that is mandated by law. The American tax system is complex, and sadly, the majority of us never learned how to file our taxes in school.
This year’s tax filing date is April 18. Nonetheless, getting started as soon as you can is beneficial.
In this post from Your Part Time Accountant, we reveal 6 professional tax filing advice you should be aware of. All from what to do as the deadline draws near to whether hiring a tax preparer is worthwhile.
There Is No Fee for Filing Your Taxes
Download your tax forms from the IRS website, read the instructions, and complete them. Then, submit them by mail or online as one free alternative.
That is simpler if someone, such as a parent, has already guided you through it or if your tax situation is straightforward, such as having only one job in one state for the entire year.
You can use free internet tools if your tax situation is more complicated. You are eligible for the IRS Free File program if your gross adjusted income is $73,000 or less. Visit the IRS website for further details.
Take Into Account Tagging a Specialist
Consultation with a tax preparer or accountant is an additional choice. That may make sense if this is your first time filing taxes. Or if you’ve had a significant shift in your life, such as getting married or establishing a new business. It can also make sense if you want to do some tax planning for the coming year.
Start by asking friends and relatives for recommendations if you’re looking for a professional. Afterward, interview the subject. Ask them questions in advance, such as: Will they be providing you with tax advice or will they merely be completing and filing the forms? Do you have a scheduled appointment? And if they make a mistake, what happens?
Assemble Your Papers
The IRS maintains a list of possible supporting documents. Tax preparers can also provide one for you. W2 forms, which your employers mail to you and which record your income, bank interest forms, student loan interest forms, and any receipts for items you intend to claim as a tax credit or deduction, such as medical costs or charitable contributions, are a few typical examples.
Research Tax Deductions and Credits
Both are advantages that reduce your tax liability. A tax credit reduces your overall tax liability. It is added to the amount you owe. Contrarily, a tax deduction reduces the amount of income you have to pay tax on.
Visit the IRS website to determine which credits and deductions you qualify for. If you use software, it will ask you questions to guide you in determining this.
You May Request an Extension, but You Will Still Be Charged
You can submit a request for an extension online with the IRS if you anticipate missing the April 18 deadline this year.
After that, you’ll have until mid-October to submit the paperwork. Nonetheless, if you owe money, you should still estimate how much it is and pay it right away to avoid penalties in the future.
Plan for the Upcoming Year
Consider the mistakes you made on your tax return this year. For instance, did you find yourself with a big debt? Do you have a sizable refund? That simply implies you made a loan to the federal government without charging interest.
Making improvements now will prevent that from occurring the following year. To properly inform your employer of how much tax should be deducted from your paycheck, for example, ask your employer for a form W-4.
Moreover, keep an eye out for any new tax credits, deductions, or refunds that you may qualify for. Your next tax bill might be reduced with some forethought and investigation now.