It’s officially crunch time to crunch those numbers. Monday is Tax Day, and here’s how you can file to your advantage:
First, go to that drawer with all your receipts. Local tax professional Ruth Escobar said they may be deductible.
“Sometimes they can reduce the amount you’re paying, sometimes you’re stacking them up to reduce the amount that you owe,” Escobar said.
Business owners: Escobar said anything you’ve spent money on is deductible, like mileage.
Deductible items for individuals include mortgage interests, real estate taxes, mortgage insurance and medical bills.
“Especially now with COVID-19, it’s important that any medical bills paid out of pocket, you are reporting it to your taxpayer to see if that’s going to make a difference with receiving more of a refund and helping pay down what you’re owing as well,” Escobar said.
Escobar added anyone who has not received their stimulus (which is not taxable) may want to check with their tax professional to see if their system allows requests to the IRS to get that first or second stimulus in the form of a tax return.
“It’s going to be verified with the IRS, that you have received it or not, and then, we can get that direct deposited into your account,” Escobar said.
There’s also a student income credit for those in college.
Business owners can look into an employer retention credit. “So that credit is up to I believe, $10,000 dollars per quarter for employers that have W-2 employees,” Escober said.
Individuals who qualify also have until Monday to put a portion of their income into IRA to reduce tax liability.
Plus, there’s a chance you can earn income credit on the state taxes in addition to federal ones.
“A lot of people are not claiming that, which can make a huge difference,” Escobar said. “It can go up to two to three thousand dollars of earned income credit received for the state."
And if you’re down to the wire, check your post office hours to make sure you don’t miss certifying the money you owe the IRS.
“One of the things we noticed is that the post office is not open later. Before it was midnight, right now they’re closing at 5 p.m.,” Escobar said. “So you have to make sure you get that mark that you’ve sent that out, by May 17 by the time the post office closes.”
Important notes:
There's an extension to file taxes after tomorrow, but not to pay, according to Escobar. She said make sure you send in the estimate of what you owe to the IRS.
If you owe money to the IRS, she said you definitely want to make sure you file those taxes and pay on time, Monday. If you don’t pay, there will be penalty fees and an added interest rate. If you don’t owe money, she said you can file taxes during the year.
If you find that you are unable to pay your taxes, you can request for the IRS to waive some of your fees depending on your circumstances, according to Escobar.
