Filing taxes can be
a difficult thing for most people. Even if you are a finance or accounting
professional, it might not be so easy to navigate through tax filing if your
situation is complicated. Complicated here means, you have multiple incomes,
multiple schedules, and deductions. If you are having trouble on deciding
either you would like to file your taxes on your own or take some expert
advice, it is helpful to evaluate your tax situations:
Simple vs. Complicated Situation:
If
you only have W2, it is simple to enter the info in free online tax software sites
such as H&R block (www.hrblock.com ),
Turbo Tax( www.turbotax.com), TaxAct ( www.taxact.com ), Credit Karma (www.creditkarma.com ) and other sites.
Most of these sites guides you through step by step to put all information in
your W2. Some of these free online options also allow you to upload your W2. If
you have to file your state tax and you only have W2 income, you will also get
free state tax return from most of the tax software companies. If you have
schedules such as self-employed, 1099, and other income to report, you might
need to pay extra fee for using this schedules in most of these tax software
sites. Credit Karma Tax provides more schedules for free.
Online Support vs. Face to Face Tax Support:
These
days, there is a variety of options for you to get support in filing your
taxes. You can visit one of the local sites in Walmart, H&R Block, Liberty
Taxes, and other local tax offices. They will provide you face to face support
and answer any of your questions. You can also do it on your own and take
advice only when necessary. These are 'do-it-yourself' own kind of services
such as Turbotax and other online companies. The positive thing with these
companies are since you do most of the data entry, they will charge you less
than that of your local offices.
2017 vs. 2019 Tax File Differences:
The
other day I was helping a customer prepare her taxes. She had barely made a
couple hundred dollars from her temporary job and had involved in partnership
with one of her friends. Together, she made less than $20K in a year. She had
two children. When she was filing her tax return, she could not get all the
benefits she would have otherwise been entitled to. Her taxable income was so
low that she was qualified for earned income credit but could not take her two
children's child tax credit. This was because she didn't have any more taxable
income to deduct her child tax credit. This made me think that she is the one
who needs all the tax benefit but she could not utilize the benefit to its
fullest. Tax Cuts and Jobs Act (TCJA) from 2018 will change this rule and
families can deduct $2,000 per child and up to $1,400 per child will be
refundable. In this situation, the person I was helping with in 2017 will get
some refund no matter what is her taxable income is. This is good news for low
income families until December 2025. After 2025, the TCJA benefits will
phase-out and will roll-back to 2017 rules.
From 2018, tax filing will be different for most of the people since standard
deductions will double from 2017. Child tax credit will increase and portion of
it will be refundable. Refundable means, even if you do not have taxable
income, you will still get this portion of income. If you are used to take
itemization deduction in 2017 or previous years, you might need to see if you
still need to itemize in your 2019 tax return. Most of the changes proposed by
TCJA will phase-out in 2025 for individuals, unless congress decides to extend
at that time.
Tax
is one of the biggest paycheck for many Americans. It is important to take time
to review your taxes to make sure they are correct and you are getting all
allowable refunds. You can always try to use some of these software such as www.turbotax.com to see your estimated tax
return.
Free Tax Return Services by Not-for-Profit Organizations, VITA Tax Sites:
Beside
the sources I mentioned above, VITA/TCE (Volunteer Income Tax Assistance/Tax
Counseling for the Elderly) also provide free tax preparation services to
people who generally make $54,000 or less, persons with disabilities and
limited English speaking taxpayers who need assistance in preparing their own
tax returns
Visit this link to find VITA Tax site near you:
For any tax related questions, it is always good idea to google/search but make sure the sources are valid and trustworthy. In the internet, the information might be old and not reliable. Taking some extra time to make sure your research is still valid helps you to prevent from paying any penalties to Internal Revenue Services (IRS).
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