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Neighbors Growing Together | Jun 20, 2018

Don’t stress about filing taxes, but find those W-2s

Jan 04, 2018

By Grace King, Mt. Pleasant News

 

It isn’t quite time yet to start worrying about filing taxes, but it is time to track down those W-2s and 1099-R forms.

As the franchisee of H&R Block in Mt. Pleasant, Robert Smith believes the most efficient way for anyone to do their taxes is through a tax preparation firm.

Each year, tax preparers are required to take 18 hours of continuing education classes so they are well-versed in any tax updates and federal law changes, Smith said. This is in addition to an initial 10-week class and final exam required to be a tax preparer. Simply put, they know their stuff.

“Tax forms are completed by a person who possesses the knowledge to fill out the forms correctly,” Smith said. “You have the satisfaction that someone is standing beside you if some error is made.”

At H&R Block, there is a standard guarantee that if there is an error that is their fault, they will pay the penalty interest. They also offer a product called Peace of Mind. This is a service contract that states if there is a mistake on a tax return that is the error of the tax preparer, they will pay up to $6,000 of additional taxes. There is a fee for the Peace of Mind service.

“It is a very beneficial product if you itemize a lot or are running a small business or farm,” Smith said.

Itemizing is the process of listing each deduction you qualify for such as medical bills, state income taxes, property taxes, mortgage interest, charitable donations, gambling winnings and employee-related expenses.

One of the biggest mistakes Smith sees when people fill out their tax forms is leaving off unemployment. He said this is because a lot of people think unemployment compensation already has taxes taken out and they don’t have to add it to the return.

Another common error he sees is people thinking they can complete a tax return without the additional W-2s. In other words, they think they can report income in 2017 on their 2018 taxes, which cannot happen, Smith said. “If the document says 2017, it has to be filed on the 2017 return,” he said.

Smith said that upon receiving a tax return, it is important to review it carefully to ensure all income and deductions are consistent.

For new clients at any tax preparation service, it is recommended that they bring in their tax returns from the previous year. This gives the tax professional an idea of all the required forms necessary for that individual. During the interview, a tax preparer will ask if there were any additional jobs or investments added in the prior year.

Tax season will open mid-January. The IRS has not yet set a firm date on when they will begin e-filing of 2017 tax returns. Jan. 31 is when employers must issue income statements to employees. The deadline for filing taxes is Tuesday, April 17.

“There is no reason to worry about filing this week or next week because your refunds won’t be processed until Feb. 15,” Smith said.

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