Last minute tax filing advice
The first week of April sparks panic in some people as the deadline to file federal and North Dakota income tax statements follows soon after.
However, late filers still have time to get things in order, according to a local tax professional.
Nick Brossart of H & R Block said of late filers, “If they’re scared they’re going to owe, some of them will wait. Some are procrastinators. Some don’t want to take the time. You have to make the time to get it done, or file an extension.”
He advises filers to make the task easier on themselves by staying organized.
“Save all your paperwork,” Brossart recommended. “Any W-2s (or receipts, or other documents), put in an envelope or file. “We (H & R Block) have these,” Brossart said, holding an envelope with a document checklist printed on the front.
“They get mailed out to clients, and it’s a tax document organizer that pretty much tells you what you need. So, if you have any 1099s, or other information, you put it in the envelope and bring it in.”
Brossart said area tax professionals and certified public accountants make it their business to keep up on the latest changes in tax laws.
Since President Trump signed a law cutting federal income taxes late in 2017, people have noticed changes after filing, Brossart observed.
He noted, “The tax rates actually went down. Most people’s tax rates went down about 3 percent. The 15 percent tax bracket dropped to 12 percent; 25 percent dropped to 22 percent. The standard deductions also increased. A single person gets a $12,000 standard deduction; head of household, you get $18,000; and married filing jointly you get $24,000, tax free.”
“Most of what you hear in the news, they talk about the refunds being less,” Brossart added. “It’s probably caused by withholding. Most employers decreased their withholding on their W-4. So, if that’s the case, they get back less.”
“Most I’ve seen have come out better. There are some who were hurt because of the tax code. If they itemize, if they’re using employee business expenses, some of those, very few around here are affected.”
“If you’re an employee,” Brossart said, “The employee business expense is no longer. If you’re self-employed, you can write some of this off, but an employee can’t. Construction workers who work on the road, they used to be able to deduct their meals and their hotels they can’t do that anymore.”
“Salesmen can’t deduct entertainment expenses; mechanics can’t write off their tools,” he continued.
However, Brossart said teachers will still be allowed to deduct up to $250 for supplies they pay for.
For clients who are certain they won’t be ready to file by the April 15 deadline, Brossart said filing an extension would help.
“If they owe anything, then they would still have to pay interest on what they owe, and a late penalty. It would be better to file an extension than just not file a tax return, because that’s going to cost them more, then,” Brossart said.
“Especially if they owe. If they have a refund, they have to file within three years, or they lose their refund.”
Brossart said H & R Block will take drop-offs of tax documents from busy people, however, he recommends taxpayers visit with the person preparing their taxes.
“We do drop offs for people who are too busy,” he said, “but you still have to tell (preparers) about anything that has changed, or give them all the proper documents. It’s best to sit down with them and actually explain your situation, especially if you’re a new client. If you just have W-2s, it’s not a big deal, but if you had education expenses, or big medical expenses, there are things (clients) don’t realize they can do unless they ask the right questions, or unless we ask the right questions. The tax preparer should interview the client to get the correct information.”
Brossart said any change in financial or business status should be discussed with an accountant, bookkeeper or tax professional, and he recommends asking tax professionals questions about changes in financial situations.