Tag Archives: 1040

Who Will Prepare Your Tax Return?

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As the start of tax filing setaxclockason approaches, the Internal Revenue Service is reminding taxpayers to start thinking about who will prepare their 2016 federal tax return. The IRS will begin processing tax returns on Monday, January 23. Many software companies and tax professionals will accept and submit tax returns before the IRS systems open on January 23.

In 2016, more than 131 million individual and family tax returns were e-filed, the most accurate, safest and easiest way to file. The rest of the returns received by the IRS, numbering over 19 million, were either prepared on a computer and printed or prepared by hand then mailed.

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Is This You?

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Review your W-4: Bigger refund or bigger paycheck?

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happy-familyLaying the groundwork for a tax refund requires some simple tax planning, a little research and some forethought. Reviewing your tax status, consulting your tax professional when filling out your W-4s and taking advantage of several tax credits can help you increase your tax refund. Newport Beach Tax and Financial can help decide which credits can get you the biggest refund. When you start a job, your employer asks you to complete form W-4. This tells your employer how much federal income tax to withhold from your paycheck. The more allowances you claim on the form, the less income tax will be held back. This will give you bigger paychecks, but a smaller tax refund (or potentially no tax refund or a tax bill at the end of the year). Claiming fewer allowances on your W-4 will mean smaller paychecks, since more tax will be withheld. This increases your chances of over-withholding, which leads to a bigger tax refund. That’s why it’s called a “refund:” you are just getting money back that you overpaid to the IRS during the year.

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Timing Can Boost Your Tax Refund

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Timing-is-everythingTaxpayers who watch the calendar improve their chances of getting a larger refund. If you can, pay January’s mortgage payment before December 31st and get the added interest for your mortgage interest deduction.

Schedule health-related treatments and exams in the last quarter of the year to boost your medical expense deduction potential.

Paying property taxes by New Year’s Eve could make the difference between itemizing and taking the standard deduction, and thus, a bigger refund. If you’re self-employed, you can pay your fourth-quarter state estimated taxes in December, rather than in January when they’re normally due, to increase your itemizing potential

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The Catch To Walmart’s Free Tax Preparation Service

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Last week, Walmart announced it would offer free tax preparation services from H&R Block and Jackson Hewitt in its stores nationwide.

But before you rejoice, know there’s a catch: Both companies are only offering these services for taxpayers filing out the 1040EZ, a basic, one-page form for single or married individuals who have no dependents and earn less than $100,000 per year. 

All they need to participate is their W2.

Unfortunately, the rest of us—a.k.a., homeowners, freelancers, business owners and parents—do not fall into this category. 

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