5 Things to Know Before Tax Season

We’re getting an extra couple of months this year, but that doesn’t mean you’re out of the woods quite yet… 

Here are the top five things you need to know before tax season begins (again).

Yes, Picking an Accountant Matters

Taking the time to find an accountant that really gets you will pay off in the end. You’ll want to select one that’s familiar with your business, up-to-date with the latest industry tips and tricks, and one you trust has your best interest in mind. Life changes like getting married, starting your own business, or buying a house can make a typical tax process much more difficult, and an accountant will diffuse a lot of the added stress that comes with starting something new.

Don’t Fib

In order to keep the public honest (and 150 million returns in check), the IRS has certain red flags that will trigger an audit. While it could be a simple mistake -- which they will then correct for you -- if they find that you’ve intentionally falsified information you can be hit with fines, added interest, or even jail time. Uncle Sam isn’t joking around when it comes to his taxes!

Make Sure You’re Filing Correctly

Your filing status determines how much you ultimately save (or pay) come Tax Day. Checking “Single,” “Head of Household,” or “Married Filing Jointly” or “Separately” will help determine which credits and deductions you can take and which forms you’ll need to fill out. It will also ensure that the right amount of taxes is being taken out of each paycheck throughout the year so you’re not hit with a heavy sum all at once.

Familiarize Yourself With Deductions

There are standard deductions and then there are itemized deductions, and depending which one is right for you is based on a variety of factors. Standard deductions are easiest and are what most taxpayers take, reducing the amount of income they are taxed on from $5,000-10,000. Itemized deductions in the medical, charity, and/or mortgage categories can save you money, however, will be a considerable more amount of work as you’ll need to gather the information backed by receipts. People tend to lean towards this more involved option when the sum of their deductions will be greater than the standard amount.

Research What’s Different This Year

In addition to Tax Day being pushed back a whole three months (July 15 is the new day of reckon), there are a number of other changes to note. Income tax brackets have slightly increased, as has the standard deduction ($12,200 for single, $24,400 for married couples), and there is now a higher threshold to deduct medical expenses. A silver lining to Tax Day, indeed.