Do you have your W2 forms? Because it is that time of year again! If you haven’t already, you need to start filing your income taxes. Make the process as easy as possible! Along with your W2, you may need 1099 and 1099-INT forms to report income other than your wages, salary, or tips. Last year was very different for a lot of people, so research what forms you might need. You will also need receipts for charitable donations if applicable and medical or business expenses if you are choosing to itemize your return when filing your income taxes.
From there, you will decide your filing status based on your martial status and how you will file your taxes. The IRS tends to recommend tax preparation software so you can e-file. It is often easiest and most accurate for returns. Though paper forms are available through the IRS. You can either use the standard deduction or do an itemized return. You can discuss with a professional what options will be best for you, if you so choose. It may be a smart time to contact a professional, if you haven’t before. Especially if you dealt with unemployment or other changes due to COVID.
Next, you will either owe money and make payments or receive a tax return. Make sure to file your taxes by April 15th! Family Credit Union members also save on tax filing software, so contact us to learn more.
The Gig Economy – Taxes
The Gig Economy is growing.While the working world is changing, the one thing that remains the same is that all workers must pay taxes. If you are working as a contractor or freelancer, you may have to pay the IRS for self-employment tax. One question that all members of the Gig Economy should ask themselves is whether they are saving enough for taxes? Continue reading to learn about paying taxes in The Gig Economy.
You May Be Considered Self-Employed 
As a freelancer or contractor, you may be providing a service to someone else. However, the Internal Revenue Services considers Gig Economy workers as self-employed. You may wonder what this means during tax time? It means that you are still responsible for the taxes that your employer would normally pay on your behalf.
Your Tax Obligations May Be Unique
Since you are considered a self-employed worker, it may be required that you file an annual tax return and pay an estimated tax quarterly. You may also have to pay a self-employment tax which pays for Social Security and Medicare. Since you are self-employed, the taxes aren’t taken out of your initial pay, so they must be paid to the IRS later.
Calculate Your Self-Employment Taxes
The IRS Schedule (Form-1040) allows self-employed workers to calculate the taxes they owe on their net self-employment pay. After you fill out this form, the Social Security Administration is able to determine your benefits through the social security program. If you prefer to avoid a big bill at the end of the year, you can choose to make quarterly payments. These are refereed as Estimated Tax payments.
Take A Test
To see if your income is subject to self-employment tax, you can take a test from the IRS. All you need to know is the type of self-employment income you’ve made and your net profit or loss from your self-employment income.
Save 30 Percent Of Your Income
Each time you get paid, you should save between 25-30 perfect of your self-employment income. This will help you pay off that large tax bill at the end of the year. If you end up not owing taxes at the end of the year, you can use those savings for something else.
The Family Credit Union
The Family Credit Union is here for all your financial needs! Contact us today and we will be happy to answer any questions that you have or provide you with more information on our services. We look forward to hearing from you!
With the new tax bill that was just passed, you may have some questions and concerns about navigating the new rules and guidelines.
The Family Credit Union has partnered with TurboTax to help you file your taxes confidently and easily. TurboTax will help you get your biggest possible refund. If you use the TurboTax Federal Free Edition, Family Credit Union members can prepare, print, and e-file their taxes for free!
New Changes On the Horizon
The majority of the provisions in the new Tax Reform bill will affect your 2018 filing, not this year’s, but there are some things to look out for. Here are some tips from Intuit TurboTax.
Business Property
If you have any property acquired and placed in service after September 27, 2017, you can expense certain pieces up to 100%. The bill also has eliminated the provision that the piece of property could not be used. The bill also includes film, television, and theatrical productions as qualified property, if released after September 27, 2017.
Medical Expenses
If you currently itemize your deductions, you can deduct qualifying medical expenses that exceed 10% of your adjusted gross income. The medical deduction remains, but has a lower floor of 7.5%.
Personal Casualty Losses
The tax break that this pertains to is retroactive to 2016 and includes the losses in any federally declared disaster area.
State and Local Taxes
Some people that have more than $10,000 in property taxes or state and local taxes have been trying to pay now to get the full deduction on their 2017 taxes. The new tax bill prohibits you from prepaying 2018 state and local taxes that were not imposed in 2017.
Turbo Tax is ready to help you file and get through all the changes that are taking effect in the new tax year.
Protect Yourself From Scammers
You may have heard about people calling and pretending they are from the IRS in order to gain your personal information or you’ve received a letter from the IRS stating that a tax return was already filed under your social security number. In both cases, scammers are trying to get your money that you worked hard for. Don’t let them win!
The IRS and state tax authorities will never initiate contact via the phone, email, or social media outlets. They will always contact you by mail first. In addition, they will not require you pay your taxes by a particular method. Be suspicious if the person insists you use a certain payment type, such as a prepaid debit card.
The IRS will contact you by mail with a bill first and they won’t demand immediate payment. If you receive a call like this, report as much information as you can to the police department. Try and get a phone number before they hang up.
You can learn more about protecting yourself from tax scammers by clicking HERE.
