Tax season for the 2024 tax year has officially kicked off, with the IRS accepting federal tax returns since late January. Filing taxes can be a daunting task for many individuals. To help you navigate this process smoothly, WRAL interviewed accountant and tax expert Turon Kendrick to outline the top 10 things you should keep in mind when filing your taxes this year.
1. File Taxes Early, But Not Prematurely
Filing early can lead to receiving refunds sooner, extra time to pay any taxes owed, prevention of tax return identity theft, and correction of potential mistakes before the deadline. However, Kendrick advises filing early only if all your documents are ready to avoid an incomplete or inaccurate return.
2. Have All Tax Documents Ready Before Filing
Ensure all your tax documents are accurate and complete to avoid errors such as wrong Social Security numbers or misspelled names. Consulting a tax professional or using reputable tax software can help you identify and rectify any mistakes before filing.
3. Be Mindful of Key Changes for the 2024 Filing Season
For the 2024 tax year, there have been changes such as threshold increases in tax brackets. This could impact taxpayers’ tax bracket status, potentially keeping them in the same bracket or even moving to a lower one. Stay informed about changes in standard deductions, contribution limits for retirement accounts, and adjustments to tax credits.
4. Major Life Events Impact Filing Status
Events like marriage, home purchase, or having a child can affect taxes significantly. Document these life changes accurately, as they can influence your standard deduction and eligibility for tax credits. Utilize online resources from the IRS to understand the tax implications of such events and ensure proper tax withholding.
5. Some Retirees or Social Security Recipients May Be Exempt from Filing
Retirees or individuals receiving Social Security benefits might not need to file taxes or pay taxes, depending on their income level and specific circumstances. Use the IRS Interactive Tax Assistant to determine if your retirement income is taxable and consider seeking advice from a tax professional to understand your tax obligations.
6. Tax Credits for College Students and Recent Graduates
Students enrolled in college may benefit from tax credits such as the American Opportunity Tax Credit and Lifetime Learning Credit. Recent graduates should be aware of potential deductions for student loan interest. Consulting a tax expert can help you navigate these credits effectively and maximize your tax benefits.
7. Resources for Taxpayers Struggling to Pay Their Tax Bill
If you are unable to pay your tax bill in full, explore options like payment plans, offers in compromise, or penalty relief programs provided by the IRS. Ensure you file your taxes or request an extension even if you can’t pay on time to avoid penalties.
8. Beware of Scams
Protect yourself from scams by refraining from sharing personal information over the phone or email. Verify the legitimacy of sources reaching out to you and be cautious when disclosing financial details. Work with tax professionals who offer secure methods for sharing sensitive information.
9. What to Do If You Make a Mistake While Filing
In case of errors in your tax return, file an amended return using Form 1040-X to correct inaccuracies or claim missed tax breaks. Ensure you seek professional advice to rectify mistakes and avoid potential implications on future returns. Some tax preparer software may not support e-filing of amended returns, so be prepared to submit a paper return if necessary.
10. Know When to Seek Professional Help
Complex tax laws can be challenging to navigate, especially if you find yourself searching the internet for guidance. Consult a tax professional if you encounter uncertainties or difficulties during the filing process. Programs like VITA and TCE offered by the IRS provide free assistance to individuals needing help with tax preparation.
The tax filing deadline for 2024 is on April 15th. By following these tips and staying informed about tax changes, you can ensure a smooth and accurate tax filing process. Remember, it’s always wise to seek professional guidance when in doubt to maximize your tax benefits and avoid potential pitfalls.