Getting your taxes done can be confusing. If you do them yourself, keeping up with tax updates can be very time consuming. Here are a few tax tips that will hopefully help!
1. If your employer offers a 401K with matching contribution options, take it! This is not just food tax advice: if someone offers you essentially free money, take advantage of it!
2. Donate to charities: You will help a good cause, feel good, declutter and possibly get a tax break! If you do this, please save reciepts and even take pictures! Keep an itemized list and got to a website like Salvation Army to get customary donation amounts. However, please keep in mind this only helps if you itemize (file a schedule A).
3. MFS – if you are thinking of filing married filing separately, please be sure there is a good reason. Most of the time, it is not beneficial and some credits and deductions are eliminated if you use it.
4. Read a 1040: if you aren’t familiar with the credits and deductions out there, take a look at a 1040. You can go to IRS.gov to get one. It lists some of the more common credits like: educators expenses; school and moving for a job.
5. If you have insurance through the Marketplace, be prepared to provide your 1095-A. The government is now requesting this form. If you don’t have insurance, you will most likely get a penalty.
6. If you owe, you may be able to reduce that amount by contributing to an IRA. This may be able to reduce your tax liability and you can make contributions to the tax return filing date.
What is your favorite tax tip? Did this help? If so, please share with someone who can use this information.