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Make sure beneficiary designations are up to date
Beneficiary designations won’t affect your taxes now, but they do affect the taxes of your heirs in the future.
Mike Moyer, certified financial planner and senior vice president/senior wealth strategist at PNC Wealth Management, says the end of the year is a great time to review your beneficiaries and make any changes you feel are needed.
Why is that important? Down the road, it will help minimize the taxes your beneficiaries and heirs pay on your assets after you die.
“If something unexpected happens to you, having your designations lined up and properly coordinated has a dramatic effect on the tax bills of who receives your assets,” Moyer says.
Can’t afford a tax pro? Check out alternatives
If you’re not comfortable doing your own taxes and can’t afford to go to a CPA or a tax giant such as H&R Block, there are options that won’t cost you a cent.
Free File Alliance is a coalition of tax software companies that partner with the IRS to help U.S. taxpayers e-file their returns. Your income cannot exceed $66,000 a year to qualify for the service.
The Volunteer Income Tax Assistance program (VITA) uses IRS-certified volunteers to offer free basic tax preparation and e-filing to people who earn less than $56,000 a year, people who are disabled or whose English is limited.
The IRS has an online location tool for hundreds of free tax preparation sites in the U.S.
In addition, the AARP Foundation Tax-Aide offers tax-preparation assistance to people 50 or older or those who can’t afford a professional tax preparer.
Decide who will prepare and file your taxes
If you had major changes in your life in 2019 — maybe you got married or divorced or started your own business — your taxes will be more complicated. As a result, you might need to hire a CPA or other tax professional to prepare and file your taxes.
Just don’t wait until the calendar flips to April to make that decision because it could end up costing you.
The average fee in 2018-2019 for a professional to prepare and file an itemized Form 1040 with Schedule C (for sole proprietors of a business) and a state tax return was a hefty $481, according to the National Society of Accountants.
Many tax professionals will charge more as the April 15 filing deadline closes in. Or you could find yourself scrambling to find someone who’s not too busy to help you.
Double-check your paycheck
After the passage of the Tax Cuts and Jobs Act in December 2017, it took the IRS a while to revise the withholding tables. If you haven’t checked the withholding amount on your pay stub this year, you should double-check your paycheck.
If you’re not having enough tax withheld from your paycheck, you will owe Uncle Sam at tax time. If too much tax is being withheld, you’ll get a refund — but maybe you’d rather have that money in your pocket every week.
Are you sure the correct amount of tax is being withheld from your paycheck? Use the IRS’ tax withholding estimator to do a checkup on your paycheck and adjust your withholding for 2020, if necessary.
“Everybody should do that, especially if your situation has changed,” says Francine J. Lipman, a professor at the William S. Boyd School of Law at the University of Nevada, Las Vegas and an expert in tax law. “It’s free and it doesn’t hurt anything.”
Use the IRS’ tax withholding estimator, especially if you fit any of these scenarios:
Two-income families
People working two or more jobs or who work only part of the year
People with children who claim credits such as the Child Tax Credit
People with older dependents, including children age 17 or older
People who itemized deductions in 2018
People with high incomes and more complex tax return
Tax Tips for 2019
Keep great records
The more meticulous you are at keeping records, the easier it'll be to file your taxes. To this end, have a filing system that allows you to organize key documents like pay stubs, tax forms, and expenses you're planning to write off. That last category is especially important if you're self-employed and plan to deduct some of the costs involved in earning your income.
04/25/2018
https://turbotax.intuit.com/irs-tax-extensions/
File a Tax Extension Online - Easy Extension | TurboTax® Official File an official IRS tax extension fast and easy online with TurboTax® Easy Extension to get more time to finish your taxes. Learn how to file a tax extension today.
04/04/2018
https://www.wsj.com/articles/last-minute-tips-as-tax-day-approaches-1522402201
Last-Minute Tips as Tax Day Approaches As the mad dash to file 2017 tax returns nears the finish line, here is the most important tip: with forms in hand, start thinking about this year’s taxes. And, there still are a few ways to cut your 2017 taxes.
Mortgage Interest, Points, and Insurance: The mortgage interest that you pay on your home, as well as a portion of the points you paid to reduce your interest rate, may be deductible if you meet the criteria listed in IRS Publication 936, "Home Interest Mortgage Deduction." This applies to mortgage debt of up to $1 million for home loans taken before December 15, 2017, and mortgages of up to $750,000 taken after that date. Mortgage insurance premiums also qualify under the mortgage interest deduction through tax year 2017, but they are subject to phase-out beginning at $100,000 AGI (for married filing jointly status).
Hidden Tax Tips.
Performing Artist Expenses: Are you the stereotypical starving artist? Certain unreimbursed business expenses of performing artists, as well as reservists and fee-basis government officials, are handled separately from other deductible business expenses.
The standard deduction for married couples who file joint tax returns rises to $13,000 for the 2018 tax year, a $300 increase. For single taxpayers and married individuals who file separately, the standard deduction rises to $6,500, up from $6,350.
03/22/2018
5 IRS tax benefit adjustments you'll want to know about in 2018 The IRS has raised the standard tax deduction for individuals and married couples, and made other tax changes for the 2018 tax year
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