Tax season can be an exciting time for taxpayers who receive a refund and stressful for those who owe the IRS. Every year I put the fun in refund and buy myself a little something then save the rest. Last year, I bought a fitness tracker. Whether you receive a refund or owe the IRS, you should file your taxes early to give yourself time to plan. Here are three tips to ensure a smooth tax season.
Do not procrastinate filing your taxes! If you are anticipating a refund this year, you are probably eager to file. Likewise, tax payers who owe the IRS should not put off filing. If you owe the IRS it is beneficial to file early and determine the exact dollar amount you owe. This will provide valuable time to set aside money or research repayment options before your taxes are due on April 15th. Planning ahead will help you avoid payment penalties and interest charges. Late filing penalties are more severe, so you should file on time even if you cannot pay.
File Your Taxes – For Free
Utilize your local Volunteer Income Tax Assistance (VITA) Program and file your taxes for free. You are eligible for this free service if your annual household income does not exceed $62,000 a year. There are two options:
- You can either let a VITA Volunteer, like me, worry about your filing status and whether or not you qualify for an Earned Income Tax Credit (EITC) or
- If you feel confident, you can use online resources to file for free. The main point here is make sure you aren’t wasting your money by paying to file or paying to receive your refund sooner. You can utilize this website to find a location near you:
Make sure you know what to bring. Here’s a checklist to help you: https://www.irs.gov/Individuals/Checklist-for-Free-Tax-Return-Preparation
Don’t Let Myths Confuse You
- You can claim your pets as dependents
- No matter how much you love your pets you cannot claim them as a dependent. I have a fur-baby myself (if you can consider a Great Dane a “baby”), and although I pay more than half of her annual living expenses, she still doesn’t count during tax season. Avoid tax fraud and leave your pets out of this one.
- Money made on the internet is tax free
- The IRS does not care if you earned your income online or offline. If you sell a product or service and made over $600 in income, you are required to declare that income when you file.
- Students don’t have to pay taxes
- This one is partially true. If the student’s gross income did not exceed $10,300 in 2015 they do not technically have to file, but if their employer withheld taxes they could qualify for a refund.
- My account/tax preparer is liable for any mistakes
- As the taxpayer, you are responsible for all information entered. Verify all information and ask any questions you have. You need to have proof for any items claimed on your taxes. Triple check to make sure you or the person that prepared your taxes entered your bank account information correctly. If not, your refund may get lost and you may not get it back.
Contact Apprisen to see how our certified Financial Services Specialists can help you make the most of your tax refund.
To schedule an appointment call 1-800-355-2227 or visit our website www.apprisen.com.