Top Tips for Tax Season

Checking with a tax preparer or financial adviser may save you money

By Deborah Jeanne Sergeant

While in the throes of the tax season, it’s a good time to consider how you can improve your tax situation for next year. Ask your tax preparer and financial adviser about what applies to your finances.

Suggestions by Randy Zeigler ,private wealth adviser and certified financial planner with Ameriprise in Oswego.

• “Bunch itemized deductions into one year, in order to exceed the standard deduction and qualify to itemize deductions – if possible.

• “Consider investing in tax-exempt municipal bonds as one possible investment option within the fixed income sector, when client tax rate equals or exceeds 22% federal tax bracket.”

Suggestions by Cynthia Scott, chartered financial consultant and founder and president of OMC Financial Services, Ltd. in DeWitt.

• “It’s a moving target. There’s so much in Congress that’s trying to be legislated. If you have a retirement plan and you have to take out your required minimum distribution which you didn’t have to take out in 2020, you can gift up to $100,000 of it if you pay it directly to a charity. That is if you don’t need the income. In 2020, people didn’t have to take out their minimum distribution. Their 2021 minimum distribution will probably be larger than in the past. They should let their accountant know so they may need to increase their estimated taxes.

• “2020 stimulus checks will not be included in your income and it also won’t impact your eligibility for government benefits.

• “The extra $600 of unemployment insurance is taxable.

• “You should use the recovery rebate credit in planning your taxes. If you owe taxes more than $2,000 but have $1,800 in stimulus checks you didn’t receive, you can use the $1,800 against taxes you owe. You will receive a tax credit for your stimulus checks. Make sure you see your accountant about it.

• “If you are getting a refund, the tax credit you didn’t get will increase your refund. Understand that the recovery rebate credit. If you have a larger minimum distribution, make sure your accountant knows about it so they can adjust for it.

• “Talk with your accountant to determine your own situation.”

Suggestions by Tiffany Waller, tax preparer at Jackson Hewitt Tax Service in Auburn.

• “Don’t fall behind. As soon as the tax year starts, get all your documents in order. Have it together by early February. Don’t wait until April 15.

• “Throughout the year, keep any documents and receipts for doctor bills if you have any.

•  “If you donate to any churches or charities or other places you donate, keep those together in an envelope so they’re not going all over or so you don’t lose any. Stay organized.

• “When you come in to get your taxes done, ask questions. A lot of people assume without asking. We can’t read minds. As questions if you don’t know about something. Ask us why. ‘Why is this amount so much?’ You can make better choices next year.

• “When people bring in their information, usually, I prefer them to sit with me, but with COVID, a lot of people aren’t comfortable. I ask a lot of questions if they do a drop- off. And then we go over things at the end, but I prefer to sit with the person so I get to know them and their situation. We have Plexiglas between us and customers, wear a mask and everything is disinfected between clients.

• “People should check into the VITA program through AARP so they don’t pay the big fees to have their taxes done.”

Note: Check out the VITA program at www.aarp.org/money/taxes/info-2018/aarp-tax-help-fd.html.