Are you prepared? How Randolph County residents can properly file for 2022 tax season
As the start of tax season approaches, there are many ways Randolph County residents can get prepared. Here is what people should know to have a successful tax return.
Tax experts believe it is important to decide who is the best fit to file taxes when preparing for them. Filing earlier will ensure more affordable rates than waiting until April.
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Asheboro accountant Joe Weaver has worked in the business for many years. When he moved to Asheboro in 2007, he opened his practice to help over 100 clients save money on taxes.
The Courier-Tribune spoke with Weaver on what to expect when filing begins. The following is edited for content and space.
What are common mistakes people make when filing taxes?
One mistake is not being aware of all the available opportunities out there. ... Sometimes they miss things like a child tax credit, for instance.
For example, if they have a mother living at home with them and they provide support, they are allowed to declare her as a dependent on their return, if she doesn’t file a return.
What tips would you give someone who is new to filing taxes?
With the stimulus payments that came out last year, anybody that was 19 and older didn't always get the stimulus money. What I found out was parents who typically claim their college students on their return, the students would not get the payments. When I do taxes with them, I show them two ways, with dependent and without dependent. In a lot of cases, by filing independently of their parents they were able to get back that stimulus payment.
The one thing I encourage young people to do is that now is the time to start saving for their retirement. For instance, if you put in $1,000 in an individual retirement account at 24, at 54 that $1,000 is going to grow and be worth a whole lot more. The more you put in, your retirement funds will grow over the years. It may be painful to set aside that money, but the benefit will be well worth it years from now.
You can also save money on annual taxes because a traditional IRA is tax-deductible. For instance, if you're getting a $5,000 refund and you file in February, you can invest those funds in a traditional IRA and might increase your refund. By filing early, you will have the refund in hand before the IRA contribution is due by April 15.
Are there any new changes for taxes due to COVID?
If students have gotten their loans forgiven in the past, that's debt forgiveness, and that was subject to tax. If you have a $10,000 debt discharge in 2021, the new law determines that is no longer subject to taxation.
For married couples and others, a lot of people don't itemize anymore because the standard deduction is so much higher. If you don’t itemize, you can't deduct contributions. Last year the IRS started allowing a $300 credit for contributions, even if you use the standard deduction. For married couples filing joint, you get to double that $300 for 2021.
The Child Tax Credit also got increased, but a lot of people might be disappointed. If they get the advance tax credit, they may not get that huge refund they might expect, as in the past, because they received it already. The child tax credit increased to $3,000 for children 17 and under and $3,600 for children under the age of 6.
Petruce Jean-Charles is a Government Watchdog Reporter. They are interested in what's going on in the community and are open to tips on people, businesses and issues. Contact Petruce at pjeancharles@gannett.com and follow @PetruceKetsia on Twitter.
This article originally appeared on The Courier-Tribune: Tips for Randolph County residents filing taxes, returns
