It’s that time again — another tax season is just warming up. While you may be trying to ignore that fact for as long as possible, the truth is that the entire ordeal might not be as bad as you think. Better yet, changes on the horizon could make your life even easier next time around.
With that in mind, here’s what you should know about preparing your taxes this year and beyond:
You can file for free (in some situations)
Given the impending deadline, it’s fairly common to see advertisements on television and online for various tax services. In more recent years, the main selling point of these ads has been that you can use them for free. While this is true, there’s also an asterisk to that which could make your situation a bit different.
In many cases, the types of forms supported by these free options are limited. Sometimes this means only allowing those filing with form 1040 EZ, although each service is different. Meanwhile, those who are self-employed, have investment earnings, or other more advanced situations may have to upgrade to a paid plan instead.
You should start early
At this point, you still have nearly two months before your 2017 returns are due on Apr. 17. However, there’s good reason to beat that deadline by as much time as you can.
For one, if you’re entitled to refund, filing earlier means you’ll get your money sooner. On the other hand, if you owe money, you’ll likely want to know about it ahead of time and save up before writing a check. Lastly, keep in mind that things can get complicated when it comes to your taxes. Therefore, you’ll want to leave yourself as much time as possible to catch errors and find extra deductions while still getting your return sent in on time.
Changes to the standard deduction
Finally, it’s important to note that the way you do your taxes this year could change a bit next time around. That’s because the recently passed tax bill makes a number of modifications, perhaps the biggest of which comes to the standard deduction. In fact, in most cases, this adjustment to your taxable income will double with the 2018 tax year.
To understand why this is important, let’s look at an example. Currently, a married couple filing jointly has the option of taking a standard deduction of $12,700 or itemizing deductions (including mortgage interest, charitable donations, etc.) if those amount to a greater number. Now, that standard deduction will nearly double, rising to $24,000. As a result, there will likely be more people taking this deduction instead of itemizing, which in turn could make it easier to complete your return.
As we wait for a few changes to take place with the 2018 tax year, what matters right now is completing your 2017 return. Luckily, there are plenty of options to choose from when it comes to selecting a tax prep service. Of course, starting early has its advantages as well. So what are you waiting for? Happy tax season, America!
DISCLAIMER: This article expresses my own ideas and opinions. Any information I have shared are from sources that I believe to be reliable and accurate. I did not receive any financial compensation in writing this post, nor do I own any shares in any company I’ve mentioned. I encourage any reader to do their own diligent research first before making any investment decisions.
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