Tax Season: What you need to know
Tax months are here. In fact, the Internal Revenue Service has started receiving 2021 federal tax returns.
“With the current tax cut and Jobs Act of 2021, people can get lots of changes,” says Ellsworth Buck of Insurance, Florida's largest independent homeowners insurance agency.
You can file for free electronically with the IRS website or download paper forms. Also, tax preparation companies for example Turbo Tax and H&R Block are filing tax returns towards the IRS on behalf of their clients.
According to U.S. News & World Report, the most important changes this year are, tax rate changes, the doubling from the child tax credit, estate tax changes, business income, alimony payments and charitable and medical deductions. Also, the standard deduction nearly doubled to $12,000 for single tax filers and $24,000 for married people filing jointly.
“Everyone has a different tax situation, many will come out better with the new changes although some, worse,” says Ellsworth Buck of Insurance, Florida's top independent home insurance agency.
How to organize:
Print a tax checklist from the IRS, Turbo Tax or H&R Block. Collect and file necessary tax documents for example W-2s from your employers and 1099s out of your bank. Make sure you gather charitable contribution receipts.
Pull out old returns to remind yourself of the credits and deductions you claimed the year before.
Common life events that may affect your taxes include, marriage, divorce, growing your loved ones, educational expenses, buying or selling a house, retirement, accepting a campaign, receiving an inheritance and with a death.
You have until April, 15 to file your 2021 taxes electronically or postmark your paper taxes. Tax returns for LLCs and S-corporations are due, March 15.