5 Last Minute Tax Tips (No Judgment).

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If you haven’t done your taxes yet, don’t panic.

You’re much more likely to make mistakes when you’re under stress and feeling rushed. Take a deep breath and take some time to approach your taxes with a clear head.

We’ve compiled five last-minute tax tips to help you avoid common mistakes, save money, and set yourself up for greater financial success.

1. Know the facts

In the US, personal tax returns are due on April 18, 2022. Unlike 2020 and 2021, the IRS is sticking to its deadline this year.

However, there are still pandemic-related complexities that need to be considered. Work with your tax advisor to review any received incentive payments or child tax prepayments to ensure you received the appropriate amounts.

If you received a Paycheck Protection Program loan, your accountant can work with you to ensure you are following IRS guidelines. Expenses paid for with PPP loan proceeds are tax deductible Even if your loan has been forgiven, so don’t miss this.

Business owners can also benefit from another pandemic relief program – the Employee Retention Credit. This gives eligible employers a refundable tax credit for the employer’s share of Social Security tax. In 2021, the credit equaled 70% of qualifying wages of up to $10,000 per employee per quarter paid through September 30. That means you could be eligible for a tax credit of up to $21,000 per employee.

2. Find a good accountant

If you’re not working with one now, finding a good one this late in the game can be difficult. Invest time in your search anyway. It’s not too early to start thinking about your taxes for 2022. Recommendations are a good place to start.

Your accountant should become a trusted member of your wealth strategy team. Look for a CPA who will take the time to get to know you and your goals. The best tax advisors use a proven lasting tax reduction strategy that aligns with your wealth strategy.

3. Maximize deductions

There’s no reason to pay more taxes than you owe. However, we often see that people do just that because they fail to make qualifying deductions.

Remember: tax deductions are not loopholes. Instead, these are incentives that the government intentionally included in the tax code to encourage people to spend money on things that the government believes will benefit society at large, such as: B. setting up a company or investing in housing.

If you haven’t been tracking throughout the year, take the time to review your financial transactions and other expenses. For each, ask: How can this be discontinued?

Deductions may include:

  • home office
  • donation contribution
  • automobiles
  • childcare
  • Interest on student loans
  • education and training
  • Business trip

Work with your tax advisor on this. Even now, there are still some ways to increase your 2021 deductions by contributing to certain retirement plans — including IRAs and SEPs — before April 18.

4. Check your state taxes if you have a pass-through unit

Most U.S. corporations are pass-through entities, or PTEs, a type of corporate structure in which the corporation’s profits go toward the individual income taxes of owners and members. Some states have created an incentive for these companies in the form of an optional pass-through entity tax, so it’s important to know the rules in your state.

Here’s how it works: The Tax Cuts and Jobs Act of 2017 limited the deduction people could take for their state and local taxes to $10,000. In states with an optional PTE tax, eligible taxpayers can shift the payment of state income taxes from the individual to the corporation where the taxes are fully deductible.

This is one of many tax strategies that you can rely on your accountant to consider in your planning.

5. Ask for an extension if you need one

Request an extension if you can’t file an accurate tax return by April 18, but don’t wait to pay if you owe additional taxes. Extension or not, all tax payments are due April 18 to avoid penalties and interest.

If you can’t make your full payment, talk to your tax professional about the best strategy. Other waivers may apply to your situation and help minimize penalties.

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