Income Tax Filing Tips for January
Although income tax returns are not due until April 15, it’s always good idea to plan ahead and file early, especially if you expect to get a tax refund. Here are six steps to take now:
1. Get ready for the arrival of records. If you don’t already have a Tax file, select a single location (even if it’s just a large envelope) to collect your W-2s, statements, and other tax-related documents as they arrive. If you receive records electronically, create a “2018 taxes” folder or subdirectory.
2. Contribute to an individual retirement account (IRA). Most Americans can contribute $5,500 to a Roth or traditional IRA for 2018 ($6,500 for those age 50 and older) until the tax filing date.
3. Decide how you want to do your taxes. Do you like to do it yourself or do you want to hire a pro? Do you prefer pen and paper or a computer? Now’s the time to decide.
4. Find your forms. If you file by paper, you can get forms from a public library or at IRS.gov. If you file electronically, get your software.
5. Consider electronic filing. Taxes filed electronically are processed faster than paper ones, and refunds are issued within 3 weeks. Alternatively, if you file your tax return on paper, it will take 6 to 8 weeks to receive your refund. This filing season, taxpayers with an adjusted gross income of $66,000 or less in 2018 can file Federal taxes for free via the IRS program. https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free
6. Use direct deposit. Regardless of whether you file electronically or on paper, consider having your refund check directly deposited into your credit union account. It’s another way to get your return faster.
The Tax Cuts and Jobs Act was enacted in December 2017 which made changes to tax rates and Federal income tax withholding. To learn about these changes and how it will affect filing, go to the IRS website. https://www.irs.gov/tax-reform
Copyright 2018 Credit Union National Association Inc. Information subject to change without notice. For use with members of a single credit union. All other rights reserved.