April is around the corner, it’s time to prepare for Tax Season. There are many services out there, we did a little research and found some tools that can come in handy. We understand that many of our #LatinaGeeks hermanas are freelancers, employers, consultants, students, so we gathered information from the IRS to help with many questions that you may have.
First, What the Tax Cuts and Jobs Act Means for your Paycheck?
You may have heard about the Tax Cuts and Jobs Act (TCJA), which represents the most significant change to the United States tax code in over 30 years. While there is still a lot that is unknown, this is what we do know from the IRS page and we’d like to share with you the following information to help you prepare for these changes.
Background information on these changes
On January 11, 2018, the Internal Revenue Service (IRS) issued Notice 1036, the “Early Release Copies of the 2018 Percentage Method Tables for Income Tax Withholding” to implement provisions included in the recently enacted TCJA, which was signed into law on December 22, 2017. In turn, employers are required to begin using the new 2018 withholding tax tables no later than February 15, 2018
Preparing for your Taxes- Tax tips from the Internal Revenue Service
Gather your records. Round up any documents you’ll need when filing your taxes: receipts, canceled checks and other documents that support income or deductions you’re claiming on your return.
Be on the lookout for W-2s and 1099s that will be coming in the mail; you’ll need these to file your tax return. By law, you should receive them no later than January 31.
Find answers to questions. Each year the IRS updates answers to reflect the latest changes in tax regulations. Use this FAQ, Frequently Asked Questions and Answers (FAQ) for information about taxes, including tax law changes, questions about claiming dependents, handling mistakes and payments from previous years, quarterly estimated tax payments, and many other topics. Before you call or visit an IRS.gov office, check the FAQ page for a fast answer to your income tax return questions. If your question isn’t answered, try the Interactive Tax Assistant to find answers to your tax questions about credits, deductions, general filing questions and more.
Use Free File. Let Free File do the hard work for you with brand-name tax software or online fillable forms. It’s available exclusivelyon the IRS website. Everyone can find an option to prepare their tax return and e-file it for free.
Try IRS e-file. IRS e-file is the safe, easy and most common way to file a tax return. Last year, 79 percent of taxpayers – 106 million people – used IRS e-file. Many tax preparers are now required to use e-file. If you owe taxes, you have payment options to file immediately and pay by the tax deadline. Best of all, the IRS issues refunds to 98 percent of electronic filers by direct deposit within 14 days, if there are no problems, and some may be issued in as few as 10 days.
Consider other filing options. There are many options for filing your tax return. You can prepare it yourself or go to a tax preparer. You may be eligible for free face-to-face help at a volunteer site. Give yourself time to weigh all the options and find the one that best suits your needs.
Consider direct deposit. If you elect to have your refund directly deposited into your bank account, you’ll receive it faster than a paper check in the mail.
Visit the official IRS website. The IRS website at www.irs.gov is a great place to find everything you need to file your tax return: forms, publications, tips, answers to frequently asked questions and updates on tax law changes.
Remember the number 17: Check out IRS Publication 17, Your Federal Income Tax, on the IRS website. It’s a comprehensive resource for taxpayers, highlighting everything you’ll need to know when filing your return.
Review! Review! Review! Don’t rush. We all make mistakes when we rush. Mistakes slow down the processing of your return. Be sure to double check all the Social Security numbers and math calculations on your return as these are the most common errors. Don’t panic! If you run into a problem, remember the IRS is here to help.
Check out the Interactive Tax Assistant provided by the IRS
The Interactive Tax Assistant (ITA) is a tool that provides answers to a number of tax law questions. It can determine if a type of income is taxable, if you’re eligible to claim certain credits, and if you can deduct expenses on your tax return.
It also provides answers for general questions, such as determining your filing status, if you can claim dependents, if you have to file a tax return, etc.
You can find topics using the search feature or by viewing the categories listed below.
- Do I Need to File a Tax Return?
- Whom May I Claim as a Dependent?
- How Much Is My Standard Deduction?
- What Is My Filing Status?
- Am I Eligible to Claim an Education Credit?
You are not alone, here are the top 10 Tax questions Googled
- When are taxes due?
Its April 18 this year. Usually, it’s the 15th — you can read why you get an extra three days here. (If you file for an extension, you get until Oct. 16 to file your return, because Oct. 15 is a Sunday. You must still pay what you estimate you owe by April 18, though.)
- How to file taxes
This IRS page has links to online forms you can print as well as a locator tool where you can find an office if you prefer to pick up forms in person or don’t have access to a printer. You might also find tax forms at your local library or post office.
If you make less than $64,000, the IRS has a page where you can file your taxes electronically at no charge under the Free File program. If you plan to file with a simple form like a 1040A or 1040EZ, some tax preparation companies like TurboTax, H&R Block, Jackson Hewitt and TaxAct have their own platforms you can use to do your taxes online for free.
If you’re not sure which form you should use, the IRS spells out the differences here. Not sure how to file state taxes? This IRS page has links to all of the state governments, including tax departments.
- When can you file taxes?
The IRS began accepting electronic returns for 2016 on Jan. 23, 2017.
You technically have until 11:59 p.m. on April 18 to file your taxes if you’re filing online, according to TurboTax, but waiting until the last second is a bad idea: If you’re using U.S. mail, you have to have your return and payment postmarked by April 18. Some post offices stay open late for Tax Day; you can find out which ones have extended hours here.
If you (or your accountant) file your taxes electronically, you have the option of paying online using the IRS’s Electronic Funds Withdrawal function (which is free). You can also pay via credit or debit card (which will cost you a convenience fee of a bit under $3 if you use a debit card, or around 2% of the charge if you use a credit card).
- How to file a tax extension
If you procrastinated and April 18 is looking like a long shot, experts say you should file for an extension. This doesn’t get you out of paying any taxes you owe by the deadline, but it gives you an extra six months to file. An extension will keep you from getting hit with a late-filing penalty of 5% of the unpaid taxes for each month or part of a month you’re late, up to 25%.
That’s in addition to a late-payment penalty of 0.5% of the unpaid taxes for each month or part of a month—plus interest at a rate of the federal short-term interest rate plus 3%.
If you expect a refund, you obviously have an incentive to get your return in as soon as possible to get those dollars in your pocket. If you file for an extension thinking you’ll get a refund and instead find that you owe, you’ll have to tack on the late-payment charges.
Don’t forget about state taxes. A handful of states will automatically give you an extension if you request one through the IRS, while others require a separate request to that state’s tax department. In some cases, the rules are different depending on whether you owe money or are due a refund.
- How much do you have to make to file taxes?
There are various thresholds, depending on your filing status, age, and the type of income you receive. For instance, if you’re single, under 65 and your income was below $10,350 last year, you generally don’t need to file federal taxes. This IRS tool can help you figure out if you need to file a tax return.
Even if appears you don’t have to file, experts say it’s generally a good idea to fill in the blanks on a return and see what your bottom line would be. About 70% of Americans are expected to qualify for refunds this year, according to the IRS, but many people never file to collect. The average unclaimed refund is nearly $700. Especially for lower-income Americans, a number of credits and deductions could make you eligible for a refund.
- How long to keep tax records
The IRS says you should hang onto your tax documents for three years; if you get audited, that’s generally the look-back period they’re allowed to cover.
- When is the last day to do taxes?
The filing deadline is pushed back a few days from the usual April 15 this year to the 18th. You have until midnight local time.
- Is Social Security taxed?
It’s possible. Depending on your income, up to 85% of Social Security benefits may be taxable. If you’re a single filer and your combined income—that is, adjusted gross income, nontaxable interest from municipal bonds and half of your Social Security benefits—is more than $25,000, you will have to pay taxes. If you’re married and file jointly, the threshold is $32,000.
- How long does it take to get taxes back?
The answer this year might be “longer than usual.” To combat tax fraud, the IRS is taking extra time checking filers’ tax information if they claimed either the Earned Income Tax Credit or the Additional Child Tax Credit. Under a new law, the agency is holding back refunds claiming those credits until at least Feb. 15, and people aren’t likely to see those refunds until the end of February at the earliest. On top of that, “New identity theft and refund fraud safeguards put in place by the IRS and the states may mean some tax returns and refunds face additional review,” the agency warns. For everybody else, the IRS says refunds should be issued in its standard window of 21 days from the time to get your return.
Buena Suerte on your filing. Hope our research will help make your Tax Season a little more painless.
Disclosure: Opinions are my own and not affiliated with brands or companies mentioned in this article.