Tax season is almost here and a little preparation now can help you avoid stress — and possibly put more money in your pocket.
“Be proactive, be organized, make sure all your documents are in,” said Christopher Nash is a CPA and managing partner at Nash CPAs in Norwood. “There are some real money savings this year. You could see a boost of $200 to $1,000 to $2,000, depending on who you are and what type of income you have.”
Massachusetts residents can take advantage of several new tax changes this year, including an expansion of the child and family tax credit.
“The child and family credit was increased to $440 per qualified dependents,” explained Nash. “That could save you over $100 per year per child.”
Renters in Massachusetts will also see more relief on their tax return this year.
“If you paid rent – which most people do and rent is not going down, it's only going up – the deduction did increase. It's going to give you an extra $50,” said Nash.
Certain seniors who own or rent residential property in Massachusetts as their principal residence are eligible for a refundable tax credit.
This can be an extra boost of money for people 65 and older.
“That could give you an extra $1,200 in your refund this year,” said Nash.
Residents who did any stock or crypto trading can also see savings. Short-term capital gain rates have been cut from 12% to 8.5%. However, these documents don’t get sent to taxpayers until February. Nash recommends waiting for the paperwork before filing your taxes.
“To go back and amend that return can be costly. You're going to probably have to pay a separate return fee,” said Nash. “There's going to be additional tax potentially due.”
Experts also recommend looking at last year’s return. You can log into your IRS.gov online account to see recent tax records.
“I always like my clients to pull up their transcripts through their ID.ME account just to make sure that we're not missing any forms, particularly if we've moved the past year,” said Monika Hengesbach, an enrolled agent and founder of Decision Final.
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The IRS typically starts accepting returns for the latest tax year later in January. Taxpayers must pay any taxes owed by April 15.
“This year it's not going to be extended for any weekends or holidays. So we don't have any extra days,” said Nash. “If you're trying to do everything last minute and you miss a form or you miss a deduction, that's going to cost you real money. So make sure you're planning appropriately.”
Taxpayers who file electronically and authorize direct deposit will see the quickest refunds.
“If there's nothing wrong with your tax return and you use e-file plus direct deposit, you can expect a refund in 21 days or less, generally,” said Clay Sanford, a spokesperson with the IRS.
IRS Free File is now available. Millions of taxpayers nationwide can access free software tools offered by trusted IRS Free File partners by visiting IRS.gov.