This year, you have a few extra days to complete your taxes. With the typical deadline of April 15 falling on a weekend, followed by Emancipation Day on Monday, this year’s filing date is on Tuesday, April 18.
“Though there are a few extra days to file, make sure to still give yourself ample time to gather and organize your tax information to take advantage of any and all tax deductions, or other tax breaks that may apply to you and your family,” says Kelly Perez, Wealth Advisor for J.P. Morgan Private Bank. “Many key deductions that may reduce your tax bill or provide a refund are often left on the table due to lack of preparation. Whether you file on your own or work with a paid tax professional, the initial groundwork is the key to maximizing your benefits.”
Ready to submit or get started? Here are some tips to help simplify the process, maximize your potential refund or minimize your tax burden before you finalize your return.
• Get organized. Make sure you have important documents like last year’s return, current W-2s, 1099s and mortgage interest statements on hand. You’ll also want to gather receipts for tax-deductible purchases, travel, charitable contributions and other potential write-offs. You can look online to find checklists of documents you might need to help you file.
• Be aware of tax law changes. While taxes are inevitable, what you may owe or get refunded might not be. As you finalize or start your 2022 tax return, be aware of changes to federal, state and local tax laws that could affect your refund or how much you owe. For example, if you benefitted from the child tax credit, earned income tax credit or child and dependent care credit on your 2021 return, don’t be surprised if you get a smaller refund this year. Credits expanded as part of federal Covid relief packages have now returned to pre-pandemic levels.
• Are you working from home permanently? If you have a home-based business, you might qualify for a home office tax deduction. You can potentially write off expenses for a part of your home you only use for business purposes.
• To itemize or not to itemize. Determine whether you’ll itemize your expenses or take the standard deduction. If you think your qualified expenses will be more than the 2022 standard deduction ($12,950 for most singles and $25,900 for most married couples filing jointly), it might be worth it to itemize. Taking the standard deduction can make the filing process easier, but it could mean you pay more in taxes or receive a smaller refund.
• Contribute to retirement accounts. You can fund a traditional or Roth IRA through the April 18, 2023, tax filing deadline and have it count for 2022. Traditional IRA contributions lower your tax bill right now, while your Roth IRA withdrawals are tax-free in retirement. You can contribute up to $6,000 to an IRA each year, or—if you were 50 years or older in 2022—up to $7,000 of your earned income.
• Seek help when you need it. If you have a more comprehensive tax return, it can be a good idea to work with a certified public accountant (CPA). If you need assistance in general, check if you qualify for free in-person or remote programs offered by the IRS or local organizations depending on your income, age and disability status.
• Go faster by going digital. Filing electronically will get your return to you more quickly than filing by mail. Selecting direct deposit to a bank account or prepaid card will make the process even faster.
• Need more time? If you can’t file by April 18, you can fill out a Form 4868 that will extend your filing deadline to October 16. An extension to file isn’t an extension to pay, so if you think you’ll owe, plan to submit an estimated payment amount when you file your extension.
The bottom line – Filing your taxes doesn’t have to be difficult. Getting organized now will help make tax season easier this year and put you in better shape for years to come. For more tips to help you make the most of you and your family’s finances, visit J.P. Morgan’s U.S. Tax Center at privatebank.jpmorgan.com/gl/en/insights/planning/us-tax-center.
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