As the tax filing deadline looms, many Americans are grappling with how to approach their returns. Financial advisors emphasize that leveraging tax credits and free filing programs can lead to significant savings. Some individuals remain oblivious to the impending deadline, while others are consumed by tax-related anxieties. Recent staff reductions at the IRS have heightened concerns, leading some taxpayers to file early. On average, taxpayers spend considerable time and money on filing, but assistance is available for those who qualify. Experts advise thorough preparation and early action to maximize benefits and minimize costs.
Details of the Current Tax Filing Situation
In these uncertain times, the April 15 tax deadline has become a focal point for many Americans. In a season filled with financial decisions, some individuals, like Akshay Kalra, find themselves distracted by daily life and unaware of the approaching deadline. Meanwhile, financial advisor LaRese Purnell's clients are preoccupied with tax matters, driven partly by media reports about IRS challenges. The recent layoffs at the IRS have added to the anxiety, prompting some taxpayers to submit their returns earlier than usual.
Annette Bowman, another taxpayer, expresses her apprehension about the current situation. She acknowledges the uncertainty but remains committed to handling her taxes responsibly. The IRS estimates that the average taxpayer spends over 13 hours and nearly $300 on filing. However, help is available for those who qualify. For instance, individuals earning up to $67,000 annually may benefit from the Volunteer Income Tax Assistance (VITA) program, while those with an adjusted gross income of $84,000 or less can use IRS Free File software without cost.
Purnell warns against hidden fees in tax software, noting that initial free offers often come with unexpected charges. He advises consulting a tax professional if expenses exceed $200, ensuring all possible deductions are claimed. Preparation is crucial for reducing taxable income. Contributions to retirement plans, health savings accounts, and flexible spending accounts can lower tax liability. Keeping detailed records of charitable donations also helps. Filing early, especially given IRS staffing changes, could be a wise decision.
From a journalist's perspective, this tax season highlights the importance of staying informed and proactive. It underscores the need for taxpayers to explore all available resources and not hesitate to seek professional advice when necessary. By doing so, they can navigate the complexities of tax filing more effectively and potentially save money in the process.