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Be Prepared This Tax Season

Be Prepared This Tax Season

"Nothing is certain but death and taxes," Benjamin Franklin famously declared in 1789. Not to be outdone, Albert Einstein said of taxes, "The hardest thing in the world to understand is the income tax." Regrettably, those sentiments will almost certainly always be true. With the start of a new year, it's time to start thinking about filing your taxes.

Hiring a Professional vs. Filing Your Own

It's time to decide whether you'll file your own taxes or employ an accountant after you've gathered all of your documentation — Social Security documents, income statements, tax deduction records, and cost receipts. The response varies from person to person.

The more intricate your taxes are, the more assistance you will likely want. If you are single and have only one source of income, you may be able to file your taxes yourself or through one of the many tax preparation websites available today. Hiring an accountant may be the ideal option if you are married with children, own a property, and have various investments.

Hiring a tax professional has a lot of advantages. They can assist you with filing your taxes correctly and on time, as well as determining the tax deductions and credits you are eligible for. However, hiring a tax preparation can be costly. It is often less expensive to use a reputable tax preparation website. Many are intuitive and will check your returns for possible errors, giving you peace of mind. The option you choose is determined on your level of comfort and the complexity of your return.

Key Things to Consider in 2022

Every year, new tax credits and deductions are available to taxpayers, as well as modifications to income tax regulations. This year is no exception. The following are some of the most significant changes for 2022:

  • For solo taxpayers, the standard deduction increased to $12,550, and for married couples filing jointly, it climbed to $25,100.
  • The income tax brackets were raised to account for inflation.
  • The Child Tax Credit was increased to $3,600 for children under the age of six and $3,000 for children aged six to seventeen. If you're eligible for this tax credit, you've been receiving a portion of it through installments from the IRS since July 2021, unless you choose to receive the full credit at tax time.

You may be qualified for a variety of other tax deductions and credits, including charity, medical, and business deductions, as well as the Earned Income Tax Credit and education tax credits. Before you file your tax return, make sure you discuss these with your tax advisor.

Protect Your Identity

This tax season, as always, be on the lookout for IRS impersonation scams. Phone calls or emails from someone claiming to work with the IRS are common. They may inform you that there is a problem with your tax return or that your tax filing information needs to be updated. Any emails, phone calls, or text messages informing you that something is amiss with your tax return should be avoided. If you have any concerns about your tax return, contact the IRS directly, and report any tax-related phishing attempts to

When Should You File Your Taxes?

When it comes to filing income taxes, you may get started as soon as you have all of the relevant documentation. You can either give all relevant tax forms to your tax preparer or begin working on your return once you obtain them. The most significant date to remember when it comes to income taxes is April 15, 2022, which is the deadline for filing tax returns and making tax payments. If you require an extension, you must submit an individual tax return extension form by April 18. Additionally, it is also the last day to contribute to an individual retirement account (IRA) for the tax year 2021.

If you would like to open an IRA, BANK can be of assistance. Visit any of our branch locations. Check out our IRA’s available here