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Early Withdrawals from Retirement Plans

Many people find it necessary to take out money early from their IRA or retirement plan. Doing so, however, can trigger an additional tax on top of income tax taxpayers may have to pay. Here are a few key points to know about taking an early distribution:

Choosing the Correct Filing Status

When taxpayers file their tax return, it’s important they use the right filing status because it can affect the amount of tax they owe for the year. It may even determine if they must file a tax return at all. Taxpayers should keep in mind that their marital status on Dec. 31 is their status for the whole year.

Sometimes more than one filing status may apply to taxpayers. When that happens, taxpayers should choose the one that allows them to pay the least amount of tax.

When filing their tax return, taxpayers have IRS e-file as the easiest and most accurate way to file. Its tax software helps them choose the right filing status. Most people can use tax software and e-file for free with IRS Free File. This is a free service only available on the IRS website. Visit IRS.gov and click “Free File” on the home page.

Here’s a list of the five filing statuses:

How Exemptions and Dependents Can Reduce Taxable Income

Most taxpayers can claim an exemption for themselves and reduce their taxable income on their tax return. They may also be able to claim an exemption for each of their dependents. Each exemption normally allows them to deduct $4,050 on their 2016 tax return. Here are seven key points to keep in mind on dependents and exemptions:

1. Personal Exemptions.  Taxpayers can usually claim exemptions for themselves and their spouses on a jointly filed tax return. For married taxpayers filing separate returns, an exemption can only be claimed for a spouse if that spouse:

Things to Remember When Choosing a Tax Preparer

 

Taxpayers should choose their tax return preparer wisely – with good reason. Taxpayers are responsible for all the information on their income tax return. That’s true no matter who prepares the return. Here are ten tax tips to keep in mind:

1. Check the Preparer’s Qualifications. Use the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. This tool helps taxpayers find a tax return preparer with the qualifications that they prefer. The Directory is a searchable and sortable listing of preparers with a credentials or filing season qualifications. It includes the name, city, state and zip code of:

Claim the Earned Income Tax Credit

The Earned Income Tax Credit has helped workers with low and moderate incomes get a tax break for 40 plus years. Yet, one out of every five eligible workers fails to claim it. Here are some things taxpayers should know about the EITC:

WNY Mobile Steam & Maker Lab Powered By AT&T Unveiled for Urban Schools

WNY Mobile Steam & Maker Lab Powered By AT&T Unveiled for Urban Schools

Innovative initiative is a collaboration of Computers For Children, WNY STEM Hub and AT&T to ensure more students have the opportunity to experience STEAM and makerspace educational opportunities    

Five Reasons to Choose Direct Deposit

Easy, safe and fast — that’s direct deposit. It’s the best way to get a tax refund. Eighty percent of taxpayers choose it every year. The IRS knows taxpayers have a choice of how to receive their refunds.

IRS Direct Deposit: