Preparing for Taxes: 12 Months to Financial Fitness

The deadline to file your income taxes is April 18, 2022! If you’ve been dragging your feet on filling, or looking for a place to start, read more in our most recent blog in the 12 Months to Financial Fitness series.

Preparing to File

Everyone’s tax preparation is different, and is affected by a variety of factors. Whether you’re married, have children, if you’re self-employed or employed regularly, etc. These are all things that can change elements of the tax preparation process.
 

Most folks elect to keep all of this straight in their heads by using tax preparation software like TurboTax, or using an accountant. Be aware that depending on your tax needs or the services you need, you may need to pay a fee. Check with your tax preparation service of choice to see what kind of services they offer.
 

Whichever method you choose, you should make sure you have all your personal information ready. H&R Block has a great checklist for things you’ll need to file your taxes!

Tax Deductions

Make sure you double check for deductions! When something is “tax deductible,” it means you don’t pay taxes on it. Something commonly cited as an example are donations to charity. If you made $45,000 last year, but donated $1,000 to charity, you’ll be taxed for $44,000 instead of the full $45,000. You’ll find a small list of other common deductions below:

• Interest paid on student loans
• Child and dependent care tax credits
• Charitable contributions
• Retirement or education fund contributions
• Medical expenses
• Self-employed income

Deductions can be a complicated topic to get into, as you need to choose between taking the standard deduction for the tax year or itemize your deductions. We would highly encourage visiting both those links, as they’re pages written directly by the IRS!
 

In general, taking the standard deduction is easier than itemizing. Be aware that your standard deduction may be less than your itemized deductions though, potentially making going through the itemizing process worth it since you’ll save more money. Tax preparation software can come in handy here, as you can check both ways, you’ll just need to ensure to set some time aside!
 

Last but not least, this page on the IRS’ website contains a plethora of deductions for individuals, as well as tax credits for which you may be eligible.

You Can Still Get an Extension

If you haven’t filed yet and don’t think you’ll be able to by the deadline, there are ways to get an extension all the way to October 15. Be aware there is a process that goes along with requesting an extension, and you should carefully read this page on the IRS’ website.

Save Money on Tax Preparation

If you’re a Florida Credit Union member, you can save money on two of the most popular tax preparation services in the country! Save on the hassle, as well as time, by taking advantage of this offer today!