3 On Your Side: What you need to know before filing your taxes
Transcript:
Arizona’s Family’s Scott Pasmore:
“Well, tax season is here. Starting today, you can file your 2021 tax returns. Tess, I am not even ready.”
Arizona’s Family’s Tess Rafols:
“Same here. The move we know puts the IRS back on a more normal track after that delayed start to last year's tax season because of the pandemic. And this morning, we are here to help you get ready. Well, Scott and I aren't, but Susan is. Besides, Susan Campbell is here with some help for us. Good morning, Susan.”
Arizona’s Family’s Susan Campbell:
“Good morning. I know not many people look forward to this time, but maybe you should. You might be able to get some money back between child tax credits and other benefits put in place for families because of COVID. Many of you may be wondering what changes are actually in effect this year. Well, we are helping you answer some of your questions this morning. Mary Reha from Phoenix's Arete Financial Solutions joining us now.
Mary, I know there are just a lot of changes this year. Let's jump right in. What are a couple of the big changes that people really need to keep in mind when they're starting this process of filing?”
Arete’s Mary L. Reha:
“That's a very good question. I think the number one change that people are struggling with this year is the child tax credit.
Everybody is wondering if they're gonna have to pay some of that back, if they're gonna get to keep it. Those of you that took it, early, you know, took the payment starting in July—just remember that those payments were a prepayment on the credit, and it gets reconciled on the tax return. So depending on where your income landed for the year. You may or may not have to pay back a certain portion of that. Another tricky part to this is if you are in a blended family and you, split taking the dependents each year, this is something you really want to talk with a tax professional about because there are a lot of changes in this area, and you want to do this accurately.”
Arizona’s Family’s Susan Campbell:
“The IRS is sending letters to families to remind them either, yes, you did get this amount of money, or maybe, no, you didn't. What should people be looking for in the mail from the IRS with the child tax credits?”
Arete’s Mary L. Reha:
“That is correct. They're gonna send you a letter that basically lays out what you did or did not receive for the year, you're going to bring that into your tax professional when you go speak with them, and they're going to be able to use that on your tax return to help you figure out if you're going get more or less or if you owe any back.”
Arizona’s Family’s Susan Campbell:
“This question always comes up, especially now that we're in kind of a couple years into working from home, people are wondering, can I claim things, can I get any deductions from my work from home office? Quickly walk me through what people need to keep in mind because a lot of people may not be able to claim things that they think they can.”
Arete’s Mary L. Reha:
“Yeah. The number one thing you need to keep in mind is that most people if you have a W-2 paid job, you won't be able to use your home office. If you are a contractor or paid as a contractor, you will be able to use your home office.
There's something called a simplified method that just takes into account the square feet of the house, and you get a percentage deduction, based on that, or you can go through the whole process of documenting your electricity, your water bill, your gas bill, and all of those things, and then we will take a percentage. That percentage is related to the percentage of space you use in your home, and we can use that as a deduction.”
Arizona’s Family’s Susan Campbell:
“And I know that every year, we kind of remind people file early. Walk me through why it is so critical to do that.”
Arete’s Mary L. Reha:
“It is important this year to file early for many reasons. One of the big reasons is if you are due money back, you wanna get that return in as early as possible. Everything tends to fall off and take longer with the IRS after February. So the earlier you can get started, the better. I always tease people you want a fresh tax preparer in during the tax season too but it is a good idea to get in there just in case you're missing any documentation.
A tax professional can help you figure out what it is you're missing.”
Arizona’s Family’s Susan Campbell:
“Perfect. As people are getting started today, any other really quick words of advice before we, have to let you go?”
Arete’s Mary L. Reha:
“If you've never used a tax professional before, this is a year to probably do it. There are a lot of things that have been put into place that are only good for this year or are only good for last year, and you wanna be well-educated on that.”
Arizona’s Family’s Susan Campbell:
“Perfect.
Thank you so much for your time. I appreciate your expertise, I know this is your busy season, so, we'll let you get back to work.”
Arete’s Mary L. Reha:
“Thank you.”
