Welcome to the world of filing your taxes! This annual event is something everyone that receives income must do. Don’t worry though, it is not as intimidating as you would think. The forms for a simple new-timer are easy and you can always utilize the help of a local tax specialist, too. Here are some of the ins and outs as you prepare to file your taxes for the first time this year.
Forms You Will Use
When it comes to figuring out which tax form you will fill out, it all depends on your taxable income. Most first-time tax filers will use the 1040EZ tax form. If you earned less than $100,000 in 2016, are under 65, aren’t claiming dependents or adjustments, file jointly if married and are only claiming Earned Income Credit, you can use the 1040EZ. If you would like to take advantage of tax credits, you will use the 1040A. So, for instance, if you have student loans or a health savings account, you will use this form. To claim deductions and credits, you will use a 1040. Those using the 1040 can make over $100,000, can claim any type of income and use a variety of deductions and tax breaks.
All About Deductions and Credits
When filling out your taxes, there are deductions and credits you may be eligible to take advantage of. Deductions are ways to lower the amount of your taxable income and there are two types: standard and itemized. A tax specialist can help you determine which is best for you when it comes to standard or itemized. Standard deductions are like a flat rate deduction the government sets that you can take advantage of. Depending on your circumstances, an itemized deduction may be a better choice. If you have a mortgage, investments or a health savings account (HSA), pay property taxes on your home or vehicle, or have other health care costs, you may want to consider itemizing.What is a Tax Credit
explains that this is money a person can subtract from what you owe to the IRS. These are available for circumstances such as having children.
Return vs. Owe
Tax season can be an exciting time for some, and one others dread. Really, it comes down to two things: will you get a refund or owe the IRS? The average taxpayer can get up to $2,000 back on their refund. However, there are many instances you would owe. One of the top reasons you owe depends on how much you agreed to withhold on your W-4. If you want to be sure to get a refund, you can elect to withhold a lot out of your check. The less you withhold, the more likely you are to owe. Talk to your tax expert on ways to make sure you get a refund.
When it comes to filing your taxes, there are pros and cons to using tax software vs. a professional accountant
. One of the best ways to ensure you fill out the right forms and get the biggest return you can is through a tax specialist. Bloch, Rothman and Associates is your go-to premier tax specialist. We will help you throughout the year during tax season with all your tax related needs. So, whether it’s your first-time filing or fifty-first, you will love the quality of service you receive with us. Call us today at 303-321-7160 to get started.