The busy tax season is about to start on January 15, which means you should get ready to file your tax returns. Filing tax returns can be difficult, but we are here to make it easier for you. We asked Dorothy Lawrence some of the most important and frequently asked questions about taxes. Dorothy is the founder of CEO of the Dorothy Butler Law Firm. She deals with tax and bankruptcy-related issues on a daily basis.
Here are Dorothy’s answers to some of the most important tax-related questions for you:
How can one speed up tax returns?
Everybody wants their tax refunds as soon as possible. If you want your tax refund as soon as possible, there are ways in which you can speed up the process.
Here are some of the ways Dorothy recommends in which you can speed up your tax refund.
- File as soon as possible. The sooner you file, the sooner you will receive your refund. Apart from that, filing early will also save you from tax refund theft.
- Make sure you report all taxable income.
- File your taxes electronically instead of by mail.
- Choose direct deposit instead of a check.
- Keep tracking your returns. This will give you a realistic idea of when to expect your refunds.
- File under the right status.
- Make sure you know who you can claim as dependents.
- Answer the question related to virtual currency on your Form 1040 or Form 1040-SR correctly.
- Report unemployment compensation because it is taxable.
- Double-check your tax return for any typos.
What is the best way to avoid an IRS tax audit?
IRS tax audits can be a nightmare for taxpayers. Dorothy suggests the following tips that can help you avoid an IRS tax audit.
- Avoid reporting losses on your tax return. If the IRS sees a net business loss on your tax return, they will audit you.
- Be as detailed as possible but do it only when necessary.
- Itemize and be specific about your expenses
- Make sure your paperwork is free from errors. Any discrepancies can lead to an IRS tax audit.
- Answer every question.
- Avoid unusual or unrealistic deductions.
How can a parent claim the child tax credit?
You qualify for a child tax credit if:
- Your dependent is under 18 years old.
- Your dependent is your close relative (can also be an adopted or foster child).
- The dependent has spent at least half of the last year with you.
- You provide for more than half of the dependent’s financial support.
How can one qualify to get free tax prep through the IRS Free File program?
The IRS can help you file your tax returns for free. The IRS Free File allows you to file your tax returns electronically with the help of tax preparation software for free. You can choose between guided tax preparation or Free File Fillable Forms, depending on whether your AGI is greater or less than 73,000 dollars. You will need your personal information (A copy of last year’s tax return and valid social security numbers for yourself, your partner, or any dependents), income information, receipts, and ACA filers. Remember that you can only file the current year’s tax returns using this free option.
What should a person do if he or she thinks that their tax refund is smaller than they or had expected?
There may be many reasons for receiving a smaller tax refund than you had expected. For example, if you have already received a portion of your child tax credit money in advance, that will be deducted from your net refund. You may receive a smaller refund also if you owe taxes back to the IRS. The IRS letter will explain the discrepancy. However, if you are confident that your refund should be bigger, you can notify the IRS and may receive a check for the difference.
What are the important credits and deductions people should keep in mind?
There are many deductions that people often overlook despite the fact they deserve them. While filing your tax return, Dorothy recommends that you make sure you claim the following deductions if you are confident that you deserve them.
- State sales taxes
- Charitable contributions
- Student loan interest
- Moving expenses
- Child and Dependent Care Tax Credit
- Earned Income Tax Credit (EITC)
- Gambling losses
How to make sure you choose the right tax preparer?
A lot of taxpayers, Dorothy says, get in trouble due to the negligence and incompetence of tax preparers. If you want your taxes to be filed and processed efficiently, having a competent tax preparer on your side is a must. Here are the main things Dorothy recommends you should look for in a tax preparer:
- Qualification
- Experience
- Service fees
- Accessibility
- Honesty and clarity
