3 Key Things To Check This Tax Season For 2020

February 11, 2019 Stu Q

Tax season is one of those things you either enjoy or you hate. Most muddle through it every year with the help of a tax expert, whereas others actually do it themselves. Although there is a tremendous benefit from having a tax person do your taxes, doing it yourself provides a sense of learning and understanding how the process works. Regardless of which route you decide to go, make sure you take some time to understand the basics at least. As this tax season is the first one after the massive changes last year, it will be important to understand how you can help yourselves in the coming years.

1) Check Your Withholding Status (How many dependents are you claiming)

This is likely something you have already checked in the past, but for some this is something new. In some cases, it may have been inadvertently changed. One example of this would be starting a new job. Employers have you setup a new tax form during the first few days on the job. Most of the time it is an easy setup, however, sometimes these can be messed up from the start. From there you don’t know there is an issue until it is time to file taxes and you owe money! This example has happened to us twice in the last six years. It is not a fun experience. In most situations, it is a simple check through your human resources.

2) Understand What Changed From This Year Over Last Year

Although this may seem like a simple subtraction between the two years, it is deeper than that. As mentioned, the tax laws are changing constantly. Things you may have had the opportunity to have as deductions last year are no longer available, and vice versa. Understanding what are some of the key drivers in whether you get a return or you owe money can help you plan out your finances better.

3) Ask Questions!

Yes, number three is the easiest of all! One of the best things you can do each tax season is ask questions. If you are doing them yourselves, there are tons of resources on the IRS website to help explain things you can and can’t do. If you are having a professional complete them, ask them! There is absolutely nothing wrong with wanting to better understand how it all works.

Tax season doesn’t have to be a bad thing. If you are running your finances well-balances, it should be easy. I personally enjoy doing them because it is like a puzzle that you can get rewarded for doing things right!