I am willing to bet, that not many in the world enjoy tax season, I know I don’t. But I hope I can give you some tips to help understand the tax world. Now, I am not a CPA and this is strictly passing on information that I have researched. So if there are any questions or concerns you want more information on please contact a CPA and if you need contact information for one let me know.
Make sure you have all your tax documents:
I know this may seem easy, but in today’s world where some of your tax documents come via mail and many are found online.
Tax documents can include:
1. Health Care Statements (1095-A, 1095-B, 1095-C)
-These are needed as verification that you had health insurance over the past year since it is now required.
2. Income/Deduction Statements (W-2, 1098 Forms, 1099 Forms)
-W-2 is what you get from your employer so you can report what you made to the IRS
-1098 Forms for those that either have a mortgage or student loans as you can deduct your interest expense from each
- 1099 Forms include any other income including investments and self-employment income
Take advantage of tax deductions:
There are great tax deduction opportunities to reduce your taxable income (the amount of income you report). This allows you to save on the amount of taxes you have to pay which means keeping more money in your pocket :) Deductions can include the number of children you have, if your pay for daycare, property taxes and car registration fees in certain states plus many others.
Babies can provide tax credits:
For new parents, or parents that had another child in 2016 don’t forget about the $1,000 Child Tax Credit. This directly reduces your tax bill by $1,000 if you had a child in the previous year. It doesn’t matter at what point you had your baby either. This is different than a deduction as it directly reduces your tax bill dollar for dollar.
Contribute to an IRA or HSA account:
When you contribute to an IRA for retirement or a Health Savings Account you may be eligible for certain tax deductions based on the amount you put in and your income level. Plus when you contribute to an IRA you are preparing for whatever the next stage in life you have and an HSA account is perfect for family planning.
Don’t be afraid to ask for help:
If you are in doubt, make sure you contact a professional CPA. I asked my CPA what he thought of TurboTax and he said that if you are single and work for a company, TurboTax works great, but if you run your own business with deductions, credits and making sure your have your income tracked correctly it pays off to use a CPA. CPA’s can definitely be worth the expense as they may find credits and deductions that you didn’t know you qualify for, after all tax law is their job.
This year, be proactive about your taxes and start now. If you haven’t started organizing your tax documents, it’s better to start early than doing it the night before they are due. Hopefully this quick guide can help ease some stress and give you back some time to your family.
If you end up with a nice tax return in April and need help figuring out how to best use it, give me a call and I would be happy to help figure out the best option for you.
Steven LaFleur grew up in Rapid City, SD and after high school went to college at the University of Nebraska-Lincoln where he majored in finance and met his wife Kelly. After college graduation in 2013 working for the family business for three years Steven decided it was time to pursue a passion of his in helping people and their finances. Steven is now a financial advisor at True Measure Wealth Management in Omaha, NE. Steven and his wife Kelly have two daughters who keep them busy at all times of the day. Steven enjoys skiing in the mountains and also biking and golfing during the non-snowy months.