CPA Mark Kohler walks through tax deadline basics: file an extension if you need one, track side-gig expenses carefully, and consider a Roth IRA contribution before April 15. The biggest recent change is the SALT deduction cap, though Washington residents skip it.
Meantime, we are just days away from the tax deadline. If you haven't heard, it is April 15th.
Yup, it's Monday. No extensions like when it comes on a Friday and they give you to Sunday. So we have some advice for you if you're waiting until the last minute from Mark Kohler, who is a cpa, a tax attorney as well and an author. And we are glad you're with us here on king5mornings.com.
Thanks for having me. Isn't it an exciting weekend? It's like Final Four weekend all over again.
Some of us did it CPAs, maybe.
I feel like you guys get no break at a time like this. What's the biggest piece of advice you do have for people who are procrastinating?
You bet. And I would say don't stress. It's okay to file an extension, especially if you've generally got refunds in the past and you expect the same. If you got plans this weekend, enjoy the weekend. File your extension, get online and then take the next week or two. Don't wait too long, but file later. So relieve that stress. Don't worry.
What are the biggest changes in tax laws that people should know about?
Well, luckily here in Washington, which I love, you don't. We don't. We're not paying state tax anyway. So some of the biggest hits that people are taking around the country that we see in our firm with clients is the reduction in the itemized deduction realm with the SALT deduction, the state local income tax. So that's the biggest change. Frankly, nationwide, people are freaking out about. They're finally seeing that it's a bad impact. But here in Washington, we got all the good without the bad. So those that are making less than 100 grand and just a small family or single, they're going to see a bigger standard deduction and probably a bigger refund. So that's good.
Some of these people that you're talking about have side gigs, I guess. There's a study that says 1 in 3 of Americans have a side gig. If you do and you're doing your own taxes, what should you know?
Well, this is where if you're not prepared this weekend, file an extension because you want to take the time to go back and dig up every receipt. I don't care if it's on a credit card, in your checkbook or even cash. Find any expense you can related to that Sidekick. And if you are going online, it's okay to prepare online. If you have a simpler return, it's okay. Don't stress out about that either. I love taxlayer. They're affordable online, lots of support. Get online, file your extension and then start gathering data.
Anything else that people should know about if they're going to be filing their own taxes?
Take the time to call in for support. So when you're online with again, tax lie or something, just use the online support. It's okay to ask a question and take your time. Don't rush. You don't say, oh, I got to do this before I go out to the soccer game this weekend or whatever it is. Take your time.
A lot of people use Airbnb. They use their home or their condo for an Airbnb. What changes the game in that equation for you?
Well, that's a side business that's important for people to realize. And you're gonna start raising pigs, Is that what you said? Racing?
Racing.
All racing. Okay. There could be money in that, you know, either one.
But when it involves property, is it any different if it's an Airbnb? Yeah.
Well, it's gonna be a different schedule. It's gonna be a schedule E it just as if it was a long term rental property, which I love the Airbnb. VRBO is a great tax write off. It's a small business on the side. You can take advantage of a lot of things and you should be thinking about it.
What are some other deductions that maybe people don't know about? Don't think about.
Well, let's get real and let's stick with the basketball analogy. If you're just thinking about write offs now, you're in the last two minutes of the game, people. If you're frustrated with paying taxes, let's play the other 90% of the game and get engaged this year. So next April you're not freaking out. So a couple of last minute tips that I love is, you know, put money into a Roth ira. Now, a Roth IRA is not a deduction, but it's a chance to get it in there before the 15th. And if you want to do a traditional IRA, it's okay too. So if you have a 401k at work, let's start putting money aside in a Roth IRA that grows tax free and comes out tax free. See, if we don't want to pay more in taxes, let's create tax free income, let's think ahead, and even if you make too much money, you can do a backdoor Roth IRA. So even you're maxing out your 401k at work, get into the Roth IRA invest in what you know best. I just shot a YouTube video that blew up this last week on how you could put a million dollars in a Roth IRA before you retire with just simple little strategies.
All right. Sign me up for the Mark Kohler, let's get going. So much for joining us. We really appreciate your insight here with tax day on Monday.
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