Don't Mess With Taxes

Hello, February!

Even though it's the second month of the year, it's the first full month of the annual tax-filing season and the time when most of us finally start focusing on our 1040s.

So, since February also is the shortest month, and we’re already three days into it, I’ll cut to the chase and keep this month’s recommended tax moves short.

1. Keep an eye out for tax statements. Jan. 31 is the day that W-2 and various other earnings statements are supposed to be delivered to workers. Guess what? That date usually slips. Today, for example, I got five 1099-MISC statements in my snail mail box, and a 1099-DIV issuer says to keep check online this week for that document. So, try to be patient. Keep an eye on your curbside and computer mailboxes.

If you’re unsure about what you’re waiting for, check your 2023 filing. That will give you an idea of what statements you might still be missing.

And if we get deeper into February and you’re still missing necessary tax filing documents, start bugging those issuers.

2. Decide how you'll file. Once you get all your tax statements, it's time to determine how to get that information to the IRS. Most of us will take the electronic filing route, but will we do it ourselves, or get tax help?

If your taxes are simple tax software should suffice. Even if they're more complicated, if you're comfortable filing your own taxes, the computer tax packages can work. You can buy the software or use the manufacturers' online versions. Before shelling out cash, though, see if you can get it at reduced or no cost. Some financial institutions offer their customers discounts on popular software programs.

There's also Free File. This filing season, eight software manufacturers are back, offering a no-cost version of their products. Free File generally is available this filing season to all taxpayers, regardless of filing status, with an adjusted gross income (AGI) of $84,000 or less. If you make more than that, check out the IRS' Free Fillable Forms option at the same IRS.gov Free File page.

If you live in one of the 25 states that are participating in Direct File, also look into that option. Direct File is the IRS’ created and operated online tax preparation and e-filing programs. It also is free to eligible taxpayers.

Many lower- and middle-income and elderly taxpayers can get more personal tax help by visiting an IRS-sanctioned Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) locations nationwide.

If, however, your taxes are more complicated or you're facing some new issues, it could be worthwhile to hire a tax professional. One place to start is the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications.

Note, however, that most tax pros are already helping clients who came to them much earlier, so your return will be at the end of the filing line. But at least you’ll be in line.

3. Don't forget about the Earned Income Tax Credit (EITC). This tax credit is one of the most-overlooked tax breaks. Don't join those ranks.

The EITC is available to working taxpayers, from single filers to those with larger families, and some qualifying filers could pocket thousands by claiming it.

As a tax credit, the EITC is dollar-for-dollar offset of any tax you owe. Even better, it's a refundable tax credit, which means if the amount you qualify for is more than your tax bill, you'll get the excess EITC as a refund.

For the 2024 tax year return that you’re working on now, the EITC maximum amounts range from $632 for filers with no qualifying children to $7,830 for taxpayers with three or more qualifying youngsters.

And that’s just one tax credit that’s available to taxpayers who don’t make a lot of money. You can make sure you don’t miss them or any other tax breaks by asking yourself some basic tax questions before you start work on your return.

More February tax moves: OK, that's definitely enough tax tasks to consider as we begin February. But if you do want more tax tasks for this month, check out the ol' blog's right column.

There you find, as usual, some additional tax-wise ways to fill the rest of February's 28 days. They are listed, again as usual, under the February Tax Moves heading, just beneath the countdown clock that's keeping track of how many days until we get to Tax Day 2024, which is April 15.

These tax suggestion should keep you busy, but also not so busy as you overlook other things this month, such as Valentine’s Day. Not that I’m vague nagging, but the hubby has been known to check out the ol’ blog! 😉

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