I don’t need to tell you that filing taxes can be (or should I say IS?) stressful. If it weren’t for my accountant and TurboTax I’d be totally lost! For the most part as long as you use an accountant or TurboTax, you don’t have to worry about knowing specific tax deductions or credits since they will ask you questions and give you the ones you’re eligible for based on your answers, but it’s good to bear in mind the important things to look for, especially because rules are always changing. It’s also worth mentioning, for those that don’t know, if an accountant isn’t in your budget TurboTax has a service I have used in the past that allows you to connect live via one-way video with a CPA…the CPAs also answer questions via email and phone…and quickly! A lot quicker, in my experience, than the 24 hour estimate).
In any case, no matter how you file your taxes we can all benefit from having as much information as possible to help us file correctly, which is why I turned to CPA and tax expert Lisa Greene-Lewis and she had some truly amazing insight! Don’t forget to do something nice for yourself after the stress of filing is over….
Here’s a look at insight from Lisa Greene-Lewis:
Have your forms together when you sit down to file
“When you sit down and file your taxes, have your necessary forms together like W-2s and 1099 forms, as well as receipts for tax-deductible expenses so you don’t forget anything. Filers who have student loans or college tuition expenses will also need their 1098-E and 1098-T forms, respectively. Lastly, filers who purchased health insurance through the health insurance marketplace will need the 1095-A.”
Don’t wait until the last minute
“Taxpayers who are rushing to meet the deadline often gather the incorrect information including Social Security numbers for dependents. You need the correct social security numbers in order to get valuable deductions and credits for your dependents. This one is easy to avoid if you take your time and don’t put off filing until the last minute.”
Don’t forget what you did last year
“If you did spring cleaning last year and donated some clothes and bags to charity or took some college courses make sure to have your receipts together as there are tax benefits for donating to charity, taking college courses, and many other things you do in your everyday life.”
Don’t overpay to do your taxes
“In many cases, millions of taxpayers with W-2s that can claim the standard deduction, the Earned Income Tax Credit, and the Child Tax Credit are taking their taxes to someone and paying too much when they can file their federal and state taxes for free with TurboTax Free Edition from the comfort of their own home.”
If you owe, still file
“Just remember that if you owe money and are considering going on extension, an extension is an extension of time to file and not to pay so file anyway by the deadline which is April 15 and pay as much as you can. You can ask the IRS for an installment agreement, which will allow you to pay back your tax debt over six years.
When you file with TurboTax you can just jump-start filing your taxes by taking a picture of your W-2 using your phone or tablet and automatically transfer your information to the correct forms. This not only helps to avoid any data entry, but allows you to file more quickly and with confidence that your information is accurate.
You don’t want to overpay taxes by missing out on tax deductions and credits. Additionally, a tax credit is worth more than a tax deduction—it reduces your tax bill dollar for dollar. So missing one is even more painful than missing a deduction. Make sure you’re taking advantage of these deductions and credits on your tax return so you can keep that money in your pocket!”
Your S/O or Friend Could be Your Dependent:
“So many people miss this one. Have you been supporting your boyfriend or girlfriend all year? If you have been providing over half their support, they lived with you all year, they made under $4,150 in 2018, and meet the other dependent test you may be able to claim them as a dependent. You can no longer claim the dependent exemption as that was eliminated under the new tax law, but you can claim the new credit of up to $500 for non-child dependents.”
“Big gifts you’ve made this year by check or payroll likely won’t be overlooked, but little things add up. You can write off out-of-pocket costs you incur while doing good deeds. Ingredients for casseroles you regularly prepare for a qualified nonprofit organization’s soup kitchen, for example.”
Earned Income Tax Credit (EITC)
“One in five taxpayers who are eligible for EITC fail to claim it, according to the IRS. The EITC is a refundable tax credit ranging from $519 to $6,431 for 2018 depending on your income and if you have kids or not. The credit is designed to supplement wages for low-to-moderate income workers. But the credit doesn’t just apply to low to moderate workers. You may have had changes in your income and job situation that may make you eligible for EITC. To get a refund from the EITC you must file a tax return, even if you don’t owe any taxes. Moreover, if you were eligible to claim the credit in the past but didn’t, you can file any time during the year to claim an EITC refund for up to three previous tax years.”
Child Tax Credit
“If you had children that were under 17-years-old by the end of 2018, you may be able to get a tax credit of up to $2,000 per child on your tax return – this number has doubled from tax year 2017 due to tax reform. To claim the credit, you must meet these basic requirements:
- In order to qualify, the child needs to be a citizen of the United States, U.S National, or U.S. Resident Alien, under the age of 17, filed as a dependent on your taxes, receive more than half of his or her financial support from you and have lived with you for more than half a year.
- You must report each qualifying child’s Social Security number.”