Preparing for 2017 Taxes

Hey, everybody, it's tax time again. And there's a lot of things that you can do to prepare for your taxes for not only 2017. Yeah, you can still do stuff to lower your taxes, but there's stuff that you can do for 2018. And let's talk about those. Okay, I'm going to show you your tax return and Eddie in a second will actually show you the actual tax return a lot closer up. But for your 2000 tax return, there's actually this on line 32 on the first page, there's this thing called an IRA deduction. And you can still put money in the individual retirement account up to $5,500 if you're under the age of 50, and if you're over 50, $6,500 and you have until the tax extension deadline or this year, April 17th to actually fund a retirement plan for yourself and take a deduction on your tax return. So even if you file the tax you're going to be filing this week, you still have until April 17th to fund that amount and take the deduction on your tax return for last year's taxes. So last minute stuff that you can still do. Okay. Other things that we want to take a look at on your tax returns is that a lot of the times when I ask people if they, you know, if they pay taxes, they'll say, well, no, I didn't pay any taxes, I got a refund. And. Or if you know. Or they'll tell me, yeah, you know, this year I ended up owing a little bit. Well, technically, everybody pays taxes every year. And I know some of you think that some people, even our president, isn't paying taxes, but trust me, they're paying taxes. And on line 63, you'll see the total tax amount that you pay every year. Now, if you're owing a little bit every year or owing a lot, or if you're getting money back, it's just because you either over withheld or under withheld. And so you'll see the refund on line 75 or the amount you owe on line 78. But here's the thing. We don't want you owing money. Obviously, you hate that people get a really grumpy mood when they owe taxes. And then, you know, you don't really want a large refund. It's nice getting a refund. It's nice having a certain amount of money that you can just kind of count on and have a little extra cash, but you don't want a large refund because otherwise you're giving Uncle Sam or giving the government a free loan. So how do you fix that? Well, most of the time while you're getting your taxes from prepared, you can actually grab a form, have that the tax preparer, print out the form, the W4, and just, you know, you can, you can read, you can change it and or what you're currently having withheld, have your accountant do it or you can do it, it's really simple. And then give it to your employer the very next day. And then you're not going to have this problem in 2018 when you're filing your taxes in 2019. So it's really simple. Now here's another big misunderstanding. When you're doing your taxes. So when you file, most people either put single or married and they'll put the number of dependents they have. So if they're a husband and wife and two kids, they'll put married in four. Well, it actually never asks you how many dependents you have. It says how many allowances are you taking? Allowances have to do with the number of deductions that you're taking on your tax return. You may have a large house with a lot of mortgage interest, property taxes. Also you have the kids as well. You may have large charitable contributions. So at the end of the year, if you've got a lot of deductions, what you want to do is you want to take a larger allowances.

So that way you're getting your refund throughout the year. So you're using that money to pay off credit cards to save for your kids college fund, to put them in your emergency reserves. Or what happens if you're owing money? Well, then what you want to do is you want to lower the amount of allowances. If you're, you know, married and two allowances or married in four allowances and you're owing money, you know, you want to minimize it. You want to go to married in one or married in zero. Again, your W4, go through it. Have your tax repair go through it as well. Fill it out, give it to your employer the next day, it'll change everything. Again, don't want to hear you getting big refunds. And I don't want to hear that you're owing money because very simple, change the W4, okay? This year taxes are due on April 17th, not the 15th. And also the 2018 W4 form that you're going to get is not going to be available until February 28th. That's a release date this year. Lot of proactive stuff that you need to be doing this year. The tax law just changed. Things are changing for 2018. Things are changing for 2019, and you want to prepare for those. So make sure you're having or you're scheduling more time with your tax repair this year. Great talking to you and talk to you next time about investments.