As Members already know, tax returns for this year are slightly different. There are more numbers, fewer letters and a lot of confusion.
Andrea Coombes, control specialist at NerdWallet, helps you master the stress. Here are the best strategies for your employment situation. (Attention: You may need to spend money.)
If you have a regular job and you do not have a side job:
Take the standard deduction .
Faced with Changes in the Tax Code It may be particularly difficult to determine if you qualify for certain deductions, says Coombes. For the majority, the standard deduction is the best decision since it's much higher this year ̵
Online tax services also have some other benefits. According to the IRS, the most common mistakes are a simple one, like forgetting to return or spelling out your social security number. Not only is this unlikely to happen online, and if you make mistakes, you will get a much faster return than paper. (And despite hacking fears, theft can only be detected during the tax filing, Coombes assures. So go digital, Grandpa. That makes your life a lot easier.
If you have a regular job but also have extra income:
On the software side, Coombes recommends TurboTax ($ 80- $ 200) because it's the most intuitive and easy-to-use and H & R block ($ 50- $ 90) because it offers a variety of support options. However, remember to hire a CPA that offers better strategies, reveals potential deductions, and provides financial planning that goes beyond the scope of the tax software Ask the CPA the following questions: Can I have free consultations all year long? Can you review my 401 (k) and other investments? This means that for this tax season, the average fee for assistance at 1040s claiming the standard deduction is $ 188, while a single form with schedules is $ 294. (Be organized, as 71 percent of practices charge additional fees if you show up without the right receipts or documents, or if you have wasted paperwork).
If you are self-employed:
Do not leave any deductions on the table.
Submitting your return is more complicated than following the instructions from Ikea. There are some valuable deductions to keep in mind, especially as some have changed. One of them is Home Office Deduction, which used to be for anyone working from home, but now it might be harder to qualify, says Coombes. Another valuable deduction is the "20% deduction", which may apply to self-employed persons or persons with freelance income or to hiring independent contractors. But even this year it is particularly complicated whether you qualify for these criteria or not. Another reason why you should seek help with a CPA. But it does cost: For example, if you own a business or rental property, you're likely to pay between $ 400 and $ 700, says a CPA in NYC who wanted to remain anonymous.
You may pay in the short term, but keep in mind that tax strategies ultimately only have to do with the long game. This year could be the year for pony and set a course for future savings.