The holiday season may be over, but a new season is just beginning.
But it won't be bringing merriment and joy. That's right, it's tax time once again.
The tax forms of today are a lot more complicated than the first ones in 1913. But keeping up with the new tax laws and credits could benefit you financially, as well as make things more clear.
One new change involves sales tax. You now have the option to deduct state and local sales tax.
"This is for people who itemize their deductions. If they own a house and they're able to take mortgage interest and real estate taxes and charitable deductions, then they'll also be able to take this new sales tax, "said Alice K. McWilliams with B-CS Tax Group. McWilliams is a tax preparer and an Enrolled Agent, which means she can represent a taxpayer before the IRS.
The purchase of big-ticket items can also mean big tax breaks. You can deduct sales tax from large purchases such as cars and boats. But before you think about deductions, you should start with the basics.
"The first thing you need to do is gather together all sources of income. Then after that you need to look at any deductions you may have and it's always better to bring in more information than less to your tax preparer," said McWilliams.
Merry Makela is among the many people who deal with complex tax returns. She owns a business and a farm. So must stay organized throughout the year.
"Every year when we get something that we know is going to have a tax consequence; we put it in a particular drawer. And so at this time of year I go to that particular drawer and I just spread it out over the floor and then put things into a piles," said Makela.
Doing most of the prep work yourself can also save you money, especially if someone is doing your taxes for you.
So the best thing to do is start getting all your paper work in order now because the April 15 deadline will be here before you know it.
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