Three Things to Know Before the Tax Deadline
March 15 2017 - 6:00AM
With the April 18 tax filing deadline less than five weeks away,
millions of Americans still need to file their tax returns. Whether
they’re still trying to decide how to file their taxes, double- and
triple-checking their returns to make sure they didn’t miss a penny
or simply procrastinating, here are the three things taxpayers need
to know before April 18.
When to go to a tax professional
For some taxpayers, deciding how to file is easy – preparing
their own return or getting help from a professional is as clear to
them as being a cat or dog person. But according to Kathy
Pickering, executive vice president of The Tax Institute at H&R
Block, for some taxpayers the decision is not so straightforward
and the best method might change year to year.
“In general, if you have a complex tax return – with
self-employed income, investments, rental property, or multiple
states – you should get help from a tax professional. You should
also consider a tax professional if you’ve had a major life change
in the last year, you don’t have time to do your tax return or you
need to respond to an IRS notice or audit or catch up on previous
years’ returns,” said Pickering.
Once they’ve decided to use a tax professional, taxpayers need
to find someone who can get them every tax benefit they’re entitled
to in a complete and accurate tax return. Taxpayers should look for
a tax professional who has ongoing education to keep up with
changes in the tax code, expertise in their specific tax situation,
and security measures in place to protect personal information. A
good tax professional will also guarantee their work.
Don’t overlook tax benefits or make costly
mistakes
- Earned Income Tax CreditSome taxpayers may delay filing because
they’re worried about leaving money on the table. According to
Pickering, 20 percent of eligible taxpayers do not claim the earned
income tax credit (EITC), which can potentially be worth more than
$6,200 for some families. Because eligibility can fluctuate based
on financial, marital and parental changes, Pickering says a
taxpayer can be ineligible one year and eligible the next. Another
reason so many people overlook the EITC is because they may not
earn enough money to have to file a return. But an eligible person
can still get the EITC even if they do not owe taxes.
- Itemizing deductionsAnother benefit taxpayers tend to overlook
is itemizing. “Only one in three taxpayers itemize but millions
more should – especially homeowners,” said Pickering.Owning a home
is often the key that unlocks itemization, but some taxpayers with
high state taxes and charitable contributions may also be able to
itemize. Itemizing allows taxpayers to deduct qualifying charitable
donations, medical expenses, personal property taxes, real estate
taxes, state income or sales taxes, casualty losses, mortgage
interest payments, mortgage insurance payments and more.“All of
this can add up and save taxpayers hundreds of dollars,” said
Pickering.
- Filing statusOne of the most common mistakes taxpayers make is
selecting the wrong filing status. A filing status is not always
the same as marital status; for example, a single parent could
qualify for the more advantageous head of household status.“A
taxpayer’s filing status can affect which credits and deductions
they’re eligible for, the value of their standard deduction and
their tax bracket,” said Pickering.
Avoid penalties by filing an extension
“Nearly one in three taxpayers wait until April to file, and if
you’re one of them, you need to file something by the 18th,” said
Pickering. “Don’t forget an extension to file is not an extension
to pay. If you owe money and can’t pay, you can avoid penalties by
estimating what you owe and paying at least 90 percent of that by
the April filing deadline.”
The penalty for not filing a tax return is 10 times greater than
the penalty for not paying in full. The best way to avoid this
penalty, which could add up to 25 percent to a tax bill, is to file
a completed tax return or apply for an extension by April 18.
Taxpayers who can’t pay their balance due all at once can request a
short-term extension to pay, make an installment agreement or even
pay with a credit card.
Learn more at www.hrblock.com or make an appointment by calling
1-800-HRBLOCK.
About H&R Block H&R Block, Inc.
(NYSE:HRB) is a global consumer tax services provider. Tax return
preparation services are provided by professional tax preparers in
approximately 12,000 company-owned and franchise retail tax offices
worldwide, and through H&R Block tax software products for the
DIY consumer. H&R Block also offers adjacent Tax Plus products
and services. In fiscal 2016, H&R Block had annual revenues of
over $3 billion with 23.2 million tax returns prepared worldwide.
For more information, visit the H&R Block Newsroom.
For Further Information
Gene King, 816-854-4287, mediadesk@hrblock.com
H and R Block (NYSE:HRB)
Historical Stock Chart
From Mar 2024 to Apr 2024
H and R Block (NYSE:HRB)
Historical Stock Chart
From Apr 2023 to Apr 2024