If You Need Help Preparing Your Tax Return Hire A Tax Professional
Filing several years of back taxes can be a daunting task. It may be a good idea to hire a tax professional. If you have a difficult time affording a tax professional, the following programs may be able to help you:
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The Volunteer Income Tax Assistance is a program for lower-income taxpayers, those with disabilities, and taxpayers who have a limited ability to understand English. The Tax Counseling for the Elderly program and AARP programs are for elderly taxpayers. While the VITA and TCE sites focus on preparing your taxes for you, the AARP sites focus on helping you prepare your own taxes. The IRS has free tools to find locations for these programs near you.
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If you’re in the military, the MilTax program may help you.
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The IRS also has a partnership with certain tax software companies to provide lower-income taxpayers with free software to prepare their taxes and file their tax returns. Unlike the other programs that offer some professional assistance, this is a self-help program.
Does Your State Require State Income Tax
Some states, including Florida, Nevada, Tennessee and Texas, impose no state income tax and therefore require no annual tax return. Others, such as California, Illinois and New York, charge an income tax to residents, which means filing a separate return. State tax returns are far less complicated than federal returns, but they add one more layer of complexity to the process. TurboTax charges an additional fee for state tax-prep software.
What Could Cause A Refund Delay
There are countless reasons your tax refund could be delayed. Weve outlined some common instances where a delay could occur:
- If you file a paper return, the IRS says you should allow about six weeks to receive your refund.
- If the IRS mails you a physical check, you will receive a check through the mail.
- If you file Form 8379, Injured Spouse Allocation, it could take up to 14 weeks to process your tax return.
- If your identity has been stolen and another return was filed with your social security number, it could take longer for the IRS to sort out the situation.
- If you owe a debt, like unpaid child support, your refund could be offset to pay part or all of it.
Each of the possibilities above could cause a delay or prevent receiving the refund altogether. Its important to note that each individuals tax scenario is unique and no two filings are handled exactly the same.
Also Check: When Is Nc State Taxes Due
Choosing A Tax Professional
If you need to pay someone to prepare your taxes, make sure they have the appropriate level of skill, education, and expertise to accurately prepare your return. The IRS website has great resources to help you:
Determine what kind of tax preparer you need Check a preparers credentials File a complaint about a tax preparer
Protect Yourself From Tax
Tax ID theft occurs when someone steals your personal information to file a tax return using your personal data. Usually, the fraudulent tax filer will use your Social Security number to file your return in order to collect a refund. To protect yourself from tax ID theft, you can obtain a six-digit Identity Protection PIN from the IRS. IP PINs are known only to you and the IRS so the IRS is able to confirm your identity when you file your return. Learn more about how the IP PIN works and how to apply.
Read Also: How Do Tax Liens Work
Taxes Due Today: Last Chance To File Your Tax Return Or Tax Extension On Time
It’s tax deadline day, and tax returns filed after will be considered late. Get the details and tips for quick filing.
Dan Avery
Writer
Dan is a writer on CNET’s How-To team. His byline has appeared in Newsweek, NBC News, The New York Times, Architectural Digest, The Daily Mail and elsewhere. He is a crossword junkie and is interested in the intersection of tech and marginalized communities.
Monday is your final opportunity to complete and file your 2021 tax return on time . Midnight — in your local time zone — marks the deadline for electronically filing or postmarking a tax return.
If you can’t complete and file your tax return by Monday, you’ll want to file a tax extension, particularly if you owe. The IRS could charge a 5% failure to file penalty, plus additional interest and fines on top of that. Free tax software like Cash App Taxes can help you file an extension as well as finish your return. If you are expecting a refund, there’s no penalty for filing late.
Most state income tax returns are also due on April 18, although a handful of states have different deadlines. And, of course, some states don’t require you to file income taxes at all.
For more, find the best tax software for 2022, the biggest tax changes this year and the most important deductions and credits for this tax season.
Do You Need To Make Itemized Deductions
When President Donald Trump signed the Tax Cut and Jobs Act in late 2017, the standard deduction nearly doubled. For single taxpayers, the standard deduction jumped from $6,350 in 2017 to $12,000 in 2018. For married couples filing jointly, the limit went from $12,700 in 2017 to $24,000 in 2018.
For most taxpayers, the increase means no more itemized deductions for mortgage interest or charitable contributions. With mortgage rates still near historic lows, few homeowners pay enough in interest to claim the mortgage interest deduction. And giving a few hundred dollars a year to the United Way or your alma mater will no longer trigger a tax break. For the typical taxpayer, the itemized deduction has disappeared as a reason to seek professional help.
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Tips If You Havent Filed Taxes In Years
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In a Nutshell
If you haven’t been filing your federal income tax returns, it’s a good thing youâre here! If you haven’t been filing your tax returns for years, you could avoid a lot of trouble with the IRS by filing these old returns. This article will discuss why you should file your unfiled tax returns along with tips for the best way to file these old returns.
Written byAttorney John Coble.
If you haven’t been filing your federal income tax returns, it’s a good thing youâre here! If you haven’t been filing your tax returns for years, you could avoid a lot of trouble with the IRS by filing these old returns. This article will discuss why you should file your unfiled tax returns along with tips for the best way to file these old returns.
Take Action To Avoid Penalties
Most importantly, avoid taking no action at all before the April 18 deadline.
If you dont file your return by Tax Day and dont file an extension, youll risk missing out on your tax refund if youre owed one, and could pay both interest on unpaid balances and penalties for failure to pay or file.
If you dont pay your estimated taxes due youll take on a penalty equal to 0.5% of taxes owed after Tax Day for each month the tax isnt paid, up to 25%.
If you know that you could owe a huge balance, that 0.5% could add up really quick, says Chan.
Even if you cant pay all the taxes you owe right now, look into short- and long-term payment plans the IRS offers. You may qualify to enroll in a plan to pay your taxes over time. Though these plans may still charge interest, they wont be as costly as the mounting non-payment penalties you could face otherwise.
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When Do I Get My Tax Refund
The answer to when will I get my tax refund depends from year to year.
Generally, the IRS has said that about 90% of refunds are issued within 21 days of when the return was received.
You can check on the status of your refund on the IRS website or at our Wheres My Refund page. Live updates will appear the same day e-file opens. Using this tool, you can easily track the progress of your return as it is processed.
When Will I Get My Tax Refund
The IRS is predicting significant delays in this year’s tax season, both because of unfinished past paperwork that has rolled into this year and because of the complexity of tax filing around last year’s child tax credits and economic impact payments. Taxpayers can expect longer wait times than usual for paper returns and to reach the IRS on the phone.
However, online filing remains the most efficient process, and is recommended by the IRS, which says 90% of people who e-file their tax return should get their federal refund within 21 days. In general, the IRS assures filers that the quickest and safest method for getting a federal refund is filing electronically and opting for direct deposit.
If your tax return was flagged by the IRS for errors, manual processing, or fraud detection, your refund could take longer.
To find out when your refund is coming once tax season begins, use the tracking tool on the IRS website beginning 24 hours after e-filing your return. You’ll need your exact refund amount, Social Security number or taxpayer ID number, and filing status.
Also Check: How To Get Property Tax Exemption
After You File Your Tax Return
Get your notice of assessment, find out the status of your refund, or make a change to your tax return
To provide feedback on your filing experience or any other CRA service, go to Submit service feedback – Canada.ca
To formally dispute your notice of assessment or reassessment, credit or benefit decision, you may want to file a notice of objection. To find out if this option is right for you, go to File an objection
Did You Make Market Transactions Or Sell Stocks
Most taxpayers who own stocks and bonds have the bulk of their holdings in tax-advantaged accounts, such as 401 plans, 403 plans or Individual Retirement Accounts. The IRS allows the money to grow, with compounding interest, tax-free, and those accounts add little complexity to your taxes until you reach your 70s and must begin taking the money out. If, however, you own investments in taxable accounts, things get trickier.
Dividends are taxable, so youll need to gather any tax forms your brokerage sends to the IRS each winter. When you sell an investment, you must determine your cost basis how much you paid for the shares before any splits and whether the long-term or short-term rate for capital gains applies. If youre culling a loser from your portfolio, the loss can offset other gains.
If youve invested in gold, bear in mind that securities tied to gold can create some thorny tax issues. The same can be applied to Bitcoin and other cryptocurrencies, and for complicated trading strategies such as options, the AICPAs April Walker says. In other words, the more active your brokerage account, the more likely youll want to lean on a professional for guidance.
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Get Your Return Filed Or You Could Lose Your Right To Claim A Tax Refund
You have 3 years from the due date of the return to file and claim a refund. In a normal year where April 15th falls on a weekday, this would mean you have until April 15th 3 years from that date to file and get your refund. But, you have until July 15 of 2023 to claim your 2019 tax refund. This is because the 2019 tax deadline – which would have been April 15 – was changed to July 15th because of the coronavirus pandemic.
Similarly, the deadline to claim a refund for 2020 is May 17, 2024, since the 2020 deadline has been changed to May 17, 2021, because of COVID-19. If you file an amended return to get a refund, you have the same statute of limitations for the amended return as for the original return. If you got an extension to file your original return, you have three years from the date you filed the return. This assumes you didn’t file late.
You may not know whether you have a refund due. But, if you had taxes withheld, you probably do have a refund due. Even if nothing was withheld, you may have money due through the earned income tax credit, the Affordable Care Act health insurance premium credit, the child tax care credit , or other refundable tax credits.
Did You Have A Life Event This Year
When life happens, all sorts of tax consequences can ensue. A divorce or a major health problem can wreak havoc on a once-simple tax picture. Financial windfalls and shortfalls can also dramatically change your tax outlook. If you got an inheritance from a late family members trust, you might not receive the required Form K-1 until months after the April 15 deadline, which means filing for an extension.
If you have a mortgage forgiven through a short sale, or if you have student debt retired after negotiating a financial-hardship reduction, you might receive an IRS Form 1099. In most cases, youll have to pay taxes on the forgiven amount, because the IRS considers it as income. If youre older than 70 and have an Individual Retirement Account, youll need to start preparing for annual required minimum distributions.
A life event doesnt necessarily need to send you straight to your CPAs office, but it can raise the level of tax preparation difficulty and the chances that youll want to hire a professional.
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What Do I Need To Bring To Receive Free Tax Help
Required:
- Both spouses, if filing jointly
- Picture ID for taxpayer
- Social Security card for each person listed on the return
- Proof of income, like W2s and 1099s
- Documentation of expenses
- If anyone in the household is insured through the Marketplace, Form 1095-A and dependents proof of income
Recommended:
- Account and routing numbers for direct deposit of refunds
- Prior year tax return
Acceptable Alternatives for Social Security Card:
- ITIN letter
- Social Security Benefit Statement
- Military ID with Social Security number
- Any document issued by the Social Security Administration with Social Security number last four digits must be visible
- A printout from mySocialSecurity with the last four digits of your Social Security number visible
- Please note: Per IRS regulations, a return cannot be prepared without the required documents. Prior year tax returns do NOT satisfy document requirements.
Which Option Is Best For You
My honest and short answer is that it depends. For most of us, choosing online tax prep software will work perfectly well. Most people who have used online software will tell you it is very intuitive and thorough. If youre debating about a deduction, the software will walk you through the pros and cons. If you arent even sure of which forms you need, the software will explain. The process is incredibly comprehensive and educational.
However, if you simply feel more comfortable going to a licensed tax professional in person, theres nothing wrong with that.
That said, there are plenty of options that make it easy to file your taxes online. The point is that filing online is the way to go if you dont have an extremely complex financial situation. Remember that you can go through the process of preparing your taxes with an online software and if you arent satisfied when it comes time to fileyou dont have to pay! You can take the information and walk into an H& R Block or have a tax professional complete it for you.
The bottom line is that the more complex your financial situation is the more likely it is that you should use a professional, like a CPA, to help you with tax planning and filing your taxes. For the rest of us, filing online is the way to go.
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How To Do Taxes Quicker: Make Use Of Technology
These days there are so many tools to help you file your taxes. Most will also suggest deductions and check your work before you hit the file button. If youre thinking about going this route, one of your next small actions can be to read this article on doing your own taxes, and when it might be better to hire a tax preparer.
Sign Up For Your Cra My Account:
If you havent done so already, do this first thing. It will allow you to check on the status of refunds, your outstanding balances, RRSP & TFSA contribution room, and as well keeping the Canada Revenue Agency up to date on your address and such. You will also be able to get any missing Notices of Assessment your tax preparer might require.
Life changes impact your income taxes in ways you might not be aware of. You need to tell your tax preparer what changed for you in the tax year.
Extra Tip: No matter whether you think it impacts you or not, be upfront, and make sure the details are known so you can be confident you are getting every credit and deduction that you qualify for.
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