Taxes. This time of year can mean lots of stress and anxiety for Americans. Many consumers are reporting smaller tax refunds and/or they have to owe money for the first time in quite a while.
Each year, 150 million Americans have to file their taxes. Of those, 96 percent of them use some sort of tax filing assistance.
Tax preparation company H&R Block surveyed 1,000 moms. They learned that 34 percent of moms have anxiety that they might owe money to Uncle Sam also known as the IRS.
“Four out of every 10 moms are feeling overwhelmed about the whole process,” said Lynn Ebel, manager of the Tax Institute at H&R Block. “We want to make sure that they are getting all of the credits and deductions that they deserve and that they’re not leaving money on the table. We’re here to make it easy for you. If you go to HRBlock.com/checklist, you can create a custom checklist to remember to bring in all of the important documentation that you need for your tax interview. Don’t forget other things such as a child’s social security number, or an EIN for a daycare.”
What are the advantages of doing your taxes online verses going into a physical H&R Block tax preparation location?
“Certainly it’s a matter of personal preference how you prefer to get your taxes done. However you want help along the way, H&R Block is here to help. We have the whole gamut of choice. If you want to complete prepare your taxes yourself or if you want to talk to a tax professional, you can have a tax professional review your taxes completely online…we have those options as well. If you go into the office, you have the choice of doing a drop off return and approve online or sitting there with a tax professional and having them explain to you the whole tax preparation process.”
What are some of the most popular overlooked tax credits or rebates?
“That is something that nobody wants to do, right? My tip would be, if you’re only thinking taxes once a year, set yourself up for success. Bring in your prior year taxes to have a tax professional do a second look and completing your 2018 tax return and look forward. You have a free W4 planning session with a tax professional if you get your taxes done by an H&R Block tax professional. They can look at and plan for the type of refund that you want based on all of your information at this time next year.”
Let’s talk about small business owners. What are some things they should be looking out for?
“Small business owners have a harder task of making sure that they keep their receipts. You are only going to be taxed on your taxable income minus all of your expenses. For them to be organized is most important. All of your expenses that you can tie to your business would reduce your taxable income. For them, tax planning is something that happens all year round. Working with a tax professional in the fall…making sure that they are planning for what they want during tax season would be a really smart choice for them.”
Are there certain tax write-offs that people often forget about when doing their taxes?
“There’s certainly lots of changes that occurred this year with tax reform. The standard deduction actually doubled for every filing status. Additionally, parents with children under the age of 17, more of them are able to claim the child tax credit which doubled in the amount this year. For small business owners, there’s a new qualified deduction of 20 percent even if you don’t have a separate LLC or entity filed. If you just file on your schedule C, you might be able to pay less in taxes due to that tax deduction.”
I’m hearing from a lot of folks that their tax refunds are a lot lower this year. Some Americans are saying that they have to owe money to Uncle Sam for the first time in quite a while. Why is that?
“Last year, even if you did nothing at all, your W4 was indexed for the tax changes. This means that you were taking home more money and withholding less during the year. Essentially, you were getting the benefits of the lower tax rates of tax reform throughout the year. This year, when you are filing your taxes because it’s the first year of tax reform, you can’t really compare your refund to last year’s refund. But going forward, you can plan for that. If you don’t like what happened to your refund this year, make sure that…that doesn’t happen to you next year. Last year, there was only 10 months of changes because the withholding tables didn’t change until late February-early March. This year, there is actually going to be 12 months of withholding changes. Remember to plan to update your W4 and plan for the refund that you want next year.”
Lots of people have side jobs or side hustles. Let’s say, for example, someone is a blogger or a driver for Uber or Lyft. What tips do you have for those type of people?
“Again, it’s a matter of preference how you handle that. Working with a tax professional can help you through some of those issues. We’ve seen lots of bloggers or Uber drivers where it’s a marriage filing jointly return. Their partner is able to up their withholding and take home the amount less but then you don’t have to make your estimated payments. Make sure that you are keeping all of your receipts and you’ll thank yourself at tax time next year.”
What about people who move from one state to another? Are there certain things they need to be aware of?
“The state complexity can add a whole new layer of complexity to a tax return. There are some states where you can be a part-year resident or a resident the whole year but you get a credit for taxes that you paid to another state. Depending on your situation, that could be a situation where you want to talk to a tax professional.”
I’m calling from the Las Vegas area. I’m wondering about casino winnings and losses. Do those have to be reported to the IRS?
“Certainly your gambling winnings are going to be taxable–even if you don’t receive a reporting form. This year, you can write off your gambling losses only to the extent of your gambling winnings.”
Online shopping is more popular than ever before. What should people who make purchases on Amazon or Ebay do when preparing their taxes?
“There’s going to be less people who itemize their deductions this year. This is the one area of the tax code where you can add up all of your itemized deductions and compare it against your standard deduction and see which one is better for you. This year, the standard deduction doubled for every filing status. More people are actually going to get a better benefit of using the standard deductions. In that case, you wouldn’t be deducting your sales taxes.”
Please tell me more about the standard deduction. What does that mean?
“For a marriage filing joint return, the standard deduction is actually $24,000 this year. When you think about taxes, and you’ve been itemizing your home mortgage interest and your medical expenses and your state and local income and sales taxes, you can compare that amount to your standard deduction. Choose which one is better for you. In many cases, it’s going to be the standard deduction this year.”
Any final tax tips that people should know before we wrap up?
“H&R Block has up-front transparent pricing whether you are going into an office or online. You know walking in how much it’s going to be for tax prep this year. You can get more information on tax reform or up-front transparent pricing by visiting www.hrblock.com or calling 1-800-HRBLOCK.”
Need help with tax preparation? H&R Block offers a wide range of tax preparation services to help you get your maximum refund.