The Taxman Cometh

Since we all know what the other certainty in life is (death), maybe we shouldn’t be all that upset about the onset of tax season, right?

And while it may seem that the tax code gets more complicated every year, the good news is there are also a lot more tools now than ever before to streamline the process of tax preparation and make sure you complete your return correctly. Here are a few tax hacks to dial down the pain.1

Tax Software
You’ve probably heard of Turbo Tax. It’s the market leader in tax prep software, but it’s not the only option. If your adjusted gross income is $60,000 or less (which is the case for the overwhelming majority of filers), you may qualify for free software to file your federal return. Go to the IRS website’s Free File page to learn more. Different companies have different eligibility criteria to get the freebie, so you’ll be asked to answer a few questions to match you with the right commercial tax software. And remember, not all of the IRS’ partner companies offer free state tax returns, so be sure to check those details before proceeding.

IRS Mobile App
Some filers may also qualify for free tax preparation assistance, and you can use the IRS mobile app (IRS2GO) to find IRS Volunteer Income Tax Assistance (VITA) and the Tax Counseling for the Elderly (TCE) sites. You can also use the app to subscribe to tax tips from the IRS, follow the IRS on social media, and connect to other online tools from the IRS. And once your return is filed, if you have a refund due, the app will let you check your refund status simply by entering your Social Security number, filing status, and the refund amount you’re expecting. It’s a basic app, but useful.

If you Itemize, try Expensify
Unless you have a lot of deductions, you’ll probably come out ahead by taking the standard deduction. But you don’t know until you add it up. And remember, even if you use a software program that does the math for you, the program is only as good as the information you input. So, if you have a lot of expenses that might be deductible — for things like mileage and business travel  — vow to ditch the scraps of paper and try an app like Expensify to help to keep you organized next time around.

 

Report Everything (yes, Everything) Finally, few things will trigger an audit faster than failing to report all of the income that’s been reported to the government under your Social Security number. You’re not likely to forget income noted on the W-2 you get from your employer, but be sure to also include other sources of income throughout the year, like freelance work, unemployment compensation, scholarships, and prize winnings such as gambling and lottery winnings.

 

This content provided courtesy of BALANCE.

  1. Please consult a qualified tax professional for tax advice on your specific situation.

SFFCU does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

 

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Extra Credit provides general information to help improve our Member’s financial lives. Every situation is different, so please contact us for guidance on your specific needs. The advice provided in Extra Credit is not intended to serve as a substitute for speaking to a loan representative, financial advisor, or BALANCE counselor who can help tailor a solution for you.

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