You never can predict the twists and turns that life has for you. As we ready ourselves to enter another year, Jackson Hewitt wants to make sure you know the impact that major life changes can mean more money in your pocket
Watch as Glenda Munson, Jackson Hewitt Area Manager, provides Jason Suel with some great end-of-year tax impact information.
Some life changes that impact our taxes
- There are major life changes that can impact a taxpayer’s tax burden or increase their refund. Like getting married or divorced, buying or selling a home, having children, or retiring. These life changes bring new credits and deductions to a taxpayer that they might not have been aware of before.
- Even if you have this major life change TODAY, the last day of the year, you can still claim these credits and deductions like they impacted you for the entire tax year of 2019.
Credits and deductions are available to taxpayers who have children
- The Child Tax Credit is equal to up to $2,000 per dependent child under age 17, and the Child and Dependent Care credit can get you a credit on up to $3,000 of childcare costs for a child under age 13.
- Additional incentives like the Earned Income Tax Credit (EITC), which could result in a credit of up to $6,557, are available to those who qualify.
- If a taxpayer is a single parent and this is their first child, they may now be eligible for the Head of Household filing status.
- To celebrate the babies who bring on these extra tax breaks, participating Jackson Hewitt locations, like ours at 1300 West Walnut Street in Rogers, AR, are giving away free “Cutest Tax Break Ever” baby onesies. Call our office to see if onesies are still available!
Still time to make financial moves to impact our 2019 taxes?
- Taxpayers can donate their gently used, unwanted items to a qualified charitable organization. Only donations to IRS-approved charities are deductible. Receipts for purchased items, or a record of the purchase price and fair-market-value at the time of donation, should be kept.
- Prepay spring tuition for college students before the end of the year. Tuition paid by December 31, 2019 for a session beginning before the end of March 2020 can be used to determine an education credit on 2019 tax returns.
- Taxpayers with a Flexible Spending Account (FSA) have until the end of the year to spend the remainder of their account.
- Consider contributing the max amount to a 401(k) or similar retirement plan before December 31, 2019 and reduce taxable income for the year.
- Taxpayers have until April 15, 2020 to make 2019 IRA contributions. They also have until April 15 to set up a new IRA and contribute for 2019. Those aged 70½ or older with a traditional IRA, should take their annual required distribution to avoid a penalty.
How to start preparing NOW to be ready to file in 2020
- If taxpayers changed their name or had a change of address, they need to update their information and fill out any special forms earlier rather than later.
Income tax regulations place the burden of proof on the taxpayer. Taxpayers should keep accurate records that support all income, expenses, and credits reported….so it’s time to start digging through those piles and pull together what’s needed to file your
annual tax return.
- Don’t forget to stay organized by separating paperwork into four simple categories: income items, deductions, life changes, and other.
To schedule an appointment with a local tax professional from Jackson Hewitt, click here.