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Top tax tech tip` for savvy citizens

by Staff Writer
06 Jun 2019 at 07:58hrs | Views
Tax time is over for this year, but it'll be around again soon enough. For quarterly filers, filing season is never more than a few weeks away, so now might be the best time to check out some tech tips` for tax filers. As with many other financial topics, tax apps and online technical help has advanced by leaps and bounds in a short time. Here are some of the latest tips` for U.S. taxpayers who want to maximize their savings and cut their tax bills.

Maximize Your IRA Contribution

There's no better way to take advantage of "tax-free" savings than to contribute your maximum IRA limit each year. Check with www.IRS.gov to see your particular limit. It's higher for married people who file joint returns and lowest, in most cases, for single filers or married-filing-separately taxpayers.

File on Time, even if You Can't Pay Your Whole Bill

Unfortunately, people who face tax bills they can't afford to pay all at once make a common error: they routinely file late, hoping that they'll be able to pay their entire tax bill at the later filing time. This is an error that's easily avoided. If you can't pay your entire tax bill in April, the IRS advises you to file anyway, pay what you can, and pay the rest as soon as possible.

This method is far better than paying and filing late because if you file on time, even with no payment included, you will be able to avoid the late-filing penalty. There's no reason to add insult to injury, so always file on time, whether you can pay or not. Then, send what you owe to the IRS as soon as possible. Yes, you will have to pay interest but won't get stuck with the late-filing penalty.

Know the New Rules About Home Mortgage Deductions

In the "good old days," before the recent Tax Cuts & Jobs Act, homeowners could deduct every penny of property tax they paid out. Not anymore. The new rule only allows for up to $10,000 to be deducted, even if your actual property tax payout was much higher. Some homeowners who live in high-tax states are moving to lower-tax areas to decrease the sting of this new rule. Building home equity is a goal of every homeowner, so it might make sense to decrease total tax paid in order to ramp up payments toward principal with the money saved.

Hire a Pro if Your Return is Complicated

For less than $200, you can have a CPA prepare your return, depending on how complex your tax situation is. But the point is this: the more complicated your return, the more reason you have to hire an experienced pro to file for you. CPAs, tax attorneys and Enrolled Agents (EAs) are the only professionals who can represent you before the IRS. It helps to have that added layer of security when your financial situation is one that calls for a financial pro. Even if you're audited or contacted by the IRS for any reason, you can turn the matter over to your CPA, attorney or EA and let them take care of the negotiating.

Source - Byo24News

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