Professionals offer advice ahead of tax season
MONTGOMERY, Ala. (WSFA) - It’s the end of the year and that means tax season is right around the corner. April 15, 2022 is quickly approaching. Tax professionals say now is the time to start reviewing your finances.
“This is a good time to start looking at where you are for the year review your income and expenses,” explained Cathy Mozingo, a tax partner with Aldridge Borden and Company.
Mozingo says there are still ways to slash your bill, with 2021 being a good year to make a contribution to a favorite charity. She advises it might benefit you to transfer funds from an individual retirement account.
”You might want to consider doing a qualified charitable distribution where the distribution is made directly from your IRA to the charity,” Mozingo explained. “That totally bypasses your taxable income and has the potential of lowering your taxes because you’re excluding a certain amount of income.”
While tax-related changes due to COVID-19 have subsided, Congress did expand the Child Tax Credit. While many will receive the remainder after they file their taxes, others may not qualify for the full benefit.
“The way that was designed to work was half of the credit would be paid for advances throughout the year. And then the remaining half of the credit would be claimed on the tax return when you file a tax return in April. So people need to be aware, that is a possibility. And they may actually be able to receive additional funds at that time because for most people, that credit is refundable,” said Mozingo.
Taxes are complicated, so if you have questions or concerns it’s recommended you talk to a CPA or financial advisor.
Be reminded, however, that there are a lot of tax scams during tax season. Be very careful when choosing a tax preparer. If they offer a guaranteed refund, that’s a red flag, according to the IRS.
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