Preparing your tax return is a good time to consider any changes you might need to make in your tax planning. Every time we pay taxes, we notice small lapses such as disorganized receipts, unclear investment planning, and so forth which makes filing a lot more stressful, and it also has an impact on our tax bill and savings.
Starting this tax season, if you make a few minor changes in how you handle your finances and taxes, it can bring you a bigger refund, more savings, and a stress-free tax filing.
Tax Professional Don Petronia, Executive Director of the Center for Great Neighbourhoods in Covington offers advice to low- and moderate-income groups. He receives training from the IRS every year in tax return preparation. His tax advice is not the one-advice-fits-all income groups. Looking at the particular tax situation of low and moderate-income groups, he makes suggestions that offers them the most benefits. WVXU shares these tax tips of Petronio:
“Save As Much As You Can Throughout The Year
‘Overall, I would not suggest that people use their refunds for your (main) savings plan,’ he says. ‘It could be a part of your savings plan. It could be, “I’m saving all year long and what I get here.”’ The taxpayers getting their taxes done at the center are low or moderate income so he says he understands that saving can be a luxury. The center provided data that shows most people intend on paying for housing expenses, storing money in their rainy day fund or paying their utility bills.
If You Meet The Requirements, File Your Taxes For Free
If you make less than $69,000 a year, you shouldn’t spend a dime on filing your federal tax returns. The IRS offers free filing options for people under that salary cap.
A ProPublica investigation discovered TurboTax found ways to make people pay for its services even after marketing those services as free, so beware.
Going to see an expert in-person ensures trained tax preparers can find the answers to all your questions. However, ‘paid tax preparers charge you by the form,’ Petronio says. ‘So, if you’re a low-income person who may be qualifying for child tax credit, income tax credit – maybe a dependent care deduction because you’re paying for childcare – each one of those is another form.’
Find out if you are eligible for the IRS’ free tax services here.
Actively Manage Your Tax Liabilities
If you’re working multiple jobs, review how much you’re withholding to make sure you aren’t keeping too much or so little that you’ll have to pay come tax season 2021. ‘Go to your human resources – whoever is handling payroll; they’re supposed to help you,’ he says. ‘It’s your responsibility, but they should be able to help you.’
Ask Yourself: Should the IRS Hold Onto Your Money All Year?
In some cases, people want the IRS to hold their money so come tax time, they can put money in their savings, toward debt or buy something for pleasure. But if you’re earning a moderate income Petronio wants you to rethink that. “Would you rather have more of that money spread out across your weekly/monthly paycheck?” he asks.
Petronio feels differently about giving a zero percent loan to the government, but he understands everyone’s finances differ.”
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