By: Charlestien Harris
Tax season is here, but don’t sweat it. We’ve got your back! Knowing these five tips can help you avoid the common mistakes that tax payers make and ensure that your tax return is filed on time.
1. Use E-file and Direct Deposit
Electronic filing is one of the best ways to avoid mistakes; adding and subtracting large figures can be difficult. Using e-file software computes your taxes for you automatically and avoids costly mistakes that could delay your refund and cause you to pay additional taxes and penalties. You should also choose direct deposit as soon as you have everything you need to file electronically. Taxpayers have many choices when it comes to using tax preparation software. The IRS website has links that can take you directly to those sites if you need additional resources.
2. Make sure your Stimulus and Advance Child Tax Credit payment is accurate
To ensure an accurate return, collect all necessary documents before preparing your tax return (i.e. W-2s, 1099s, advance Child Tax Credit (IRS Letter 6419) and other income-related statements). I can’t tell you how often I have had to file an amended return because tax clients forgot to bring all their tax forms or had additional tax forms arrive after filing their return.
3. Be aware of IRS updates
It’s important to be aware of any tax changes for the 2022 tax filing season, and the easiest way to do that is through the IRS website at http://www.irs.gov, where you can get the latest information and updates. You can also follow the IRS’ official social media accounts and email subscription lists to stay current on the latest tax topics and alerts, or download the IRS2Go mobile app to check your filing status at any time.
Another way to reach the IRS is by telephone, keep in mind that staffing shortages at the agency may result in lengthy phone delays. If possible, it’s best to try the online resources first. The IRS urges people to use IRS.gov to get answers to tax questions, check a refund status or pay taxes. Plus, there’s no wait time or appointment needed to use the online tools, and resources are available 24/7.
4. Keep up with your Tax Documents
It is essential to keep your tax documents in a safe location. If you are audited, having those documents nearby can help speed up your response time and make it easier to address issues with the IRS.
Generally, you should keep your tax documents for at least three years after filing, and up to six years if you did not report income that adds up to more than 25 percent of the gross income shown on your return. Keeping them up to seven years will not hurt, especially if you file a claim for a loss from securities or bad debt deduction.
According to the IRS website, you should keep employment tax records for at least four years after the date the tax becomes due or is paid, whichever is later.
5. Utilize free resources on the IRS Website
During this challenging year, the IRS reminds taxpayers that there are many free resources on IRS.gov. For those looking to avoid delays with a paper tax return, IRS Free File is an option. With Free File, leading tax software providers make their online products available at no cost as part of a 20-year partnership with the Internal Revenue Service.
This year, there are eight products in English and two in Spanish. IRS Free File is available to any person or family who earned $73,000 or less in 2021. Qualified taxpayers can also find free one-on-one tax preparation help around the nation through the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs.
Southern Bancorp serves as a VITA site. Visit BankSouthern.com/VITA for more information or call the branch nearest you for more information. You can also email me at email@example.com or call me at 662-624-5776.
Until next week–Stay financially fit!