Who Knew? Tax Tips

  • The tax filing deadline for this year is Monday, April 18th, as April 15th is Good Friday.
  • In 2017, the standard deduction for Federal income taxes almost doubled from prior years. This left most taxpayers without a need to itemize their deductions going forward.  However, North Carolina is a state that could allow those itemized deductions to be used.  Keep tracking those applicable expenses and receipts, in case you can still itemize.
  • Federal tax returns should be kept for three years in case of an Internal Revenue Service (IRS) audit. The IRS can audit tax returns up to six years if you don’t report income that should have been reported, or lifetime if your return was fraudulent.
  • A tax deduction lowers your taxable income, thereby reducing your tax liability. A tax credit is a dollar-for-dollar reduction in your tax bill.  Look for those tax credits applicable to you (especially if you have children or college expenses).
  • If you owe money to the IRS, you must make a payment by the tax filing deadline, even if you are filing an extension for your returns.
  • If a taxpayer or family earned less than $73,000 in 2021, they can use the IRS Free File tax preparation software. This includes tax prep, direct deposit and electronic filing at no cost.  Eight products in English and two in Spanish are available.  Google “IRS Free File.”
  • The most common errors on tax returns (Check these before filing!)
    • Inaccurate Social Security numbers
    • Misspelled name
    • Incorrect filing status
    • Incorrect bank account numbers for direct deposit
    • Unsigned forms

 

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

 The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.  Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person’s situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.

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