The Local Lineup https://thelocallineup.com Sat, 08 Feb 2020 02:04:37 +0000 en-US hourly 1 https://wordpress.org/?v=5.2.4 Tax Saving Ideas for 2020 https://thelocallineup.com/tax-saving-ideas-for-2020-2/ https://thelocallineup.com/tax-saving-ideas-for-2020-2/#respond Mon, 11 Nov 2019 17:11:58 +0000 https://thelocallineup.com/?p=322 Tax Saving Ideas for 2020 Read More »

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While there are still some strategies you can employ to decrease your tax liability for 2019, it’s a good idea to start thinking about 2020 in advance so you can benefit from year-long savings strategies. Here are just a few steps you can take if you’re interested in reducing your tax liability for the next year and getting better overall tax savings for 2020 in Des Moines, IA.

Adjust withholdings

There are certain times at which it makes sense to adjust your withholdings, even if you’re not doing so primarily with tax savings in mind. Examples include if you have a baby, purchase a house or get married—these are all scenarios that can have an effect on your taxes.

What you’ll need to do is ask your employer for a new W-4 that you can fill out and submit to update your withholdings. Beyond the scenarios mentioned above, you might also opt to do this if you finished the previous tax season with a lot of money still owed to the government. That’s a sign that your withholding was too low. Conversely, if you received an especially large refund but were struggling from month to month or paycheck to paycheck, you might have had your withholding set too high. Either way, you are able to make the adjustment, and the start of the year is the best time to do that.

Improve your financial organization

One of the best ways you can set yourself up for strong long-term financial health is to keep yourself informed and organized. The methods of organization you use are up to you, but you should keep good track of your income and expenses, your travel mileage (particularly for business purposes) and contributions to various accounts and investments. Make sure you keep receipts for all major purchases and for charitable contributions.

Plan to contribute more to your retirement accounts

Whenever possible, contribute the maximum amount of money to your retirement accounts. Not only will this set you up for a better financial future long after you’re done working, but it will also help you maximize the tax benefits associated with contributions to these accounts.

The manner in which you contribute to these accounts depends on the kind of account you have. A 401(k) is funded with pre-tax dollars, so this is money you’ll never actually see enter your bank account. A Roth IRA, however, is funded with post-tax dollars, so you’ll need to plan to make those contributions yourself each month. You can set up automatic transfers from your bank account to your Roth IRA account, if you so choose.

For more information about preparing your taxes for 2020 in Des Moines, IA for an easier time in the coming year, it’s best to consult with a qualified tax preparation service. Reach out to Accounting & Tax Professionals, PLC today. We will be happy to answer any questions you have, and look forward to assisting you in meeting your personal financial goals for 2020 and beyond!

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Tips for Preparing for End of Year Taxes in Des Moines, IA https://thelocallineup.com/tax-saving-ideas-for-2020/ https://thelocallineup.com/tax-saving-ideas-for-2020/#respond Sat, 26 Oct 2019 03:22:00 +0000 https://thelocallineup.com/?p=311 Tips for Preparing for End of Year Taxes in Des Moines, IA Read More »

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There are just two months left in 2019, which means the tax season is going to be upon you before you know it. One of our best tax prep tips for 2020 in Des Moines, IA is to actually get started on your tax prep before 2020 arrives. That’s right—even though you’re still in the 2019 tax season, there are some strategies you can employ to set yourself up well once you’re able to begin the tax paperwork and filing in the new year.

Here are a few steps you might take before December 31 to set yourself up well for the coming tax year.

Defer income

Your income is taxed based on the year in which you receive it. If, for whatever reason, you want to lower your taxable income for this year, you can defer some of your income into 2020. This might not be possible with standard wages or salaries, but if you’re due any bonuses, commissions or other types of payments, you can ask to wait on those payments until January.

Keep in mind that this will then increase your tax burden for 2020, but you may be in a position where it’s advantageous to save money now. That said, if deferring income could potentially push you into a higher tax bracket next year, it’s also a good idea to just keep that income for 2019.

Search for last-minute deductions

Another way you can lower your tax bill is by maximizing your deductions for 2019. Under the new tax system, most people will simply take the standard deduction. But if you do plan to itemize, there are ways you can lower your tax bill for this year.

You could contribute to charity at any time you wish, donating either cash or appreciated stock or property, which would double up on the potential tax benefits you’d receive as a result of the donation. You will need receipts to back up any charitable contributions you make, just in case the IRS comes calling with an audit.

In addition, if you have any expenses coming up that could net you some tax breaks now, you could pay those expenses early. Examples include medical bills, property tax bills due in early 2020 and estimated state income tax bills due in January.

Sell bad investments

If you know you’re going to need to pay some capital gains taxes, you can sell off some investments that lost during the year to offset some of those gains. Up to $3,000 of excess loss can be used to offset other sources of income as well, but any more than $3,000 and you’re best off carrying it into next year.

Max out your retirement accounts

You can maximize the tax benefits on your retirement accounts by contributing the maximum allowed amount each year. This applies to both IRAs and 401(k)s.

For more information about some year-end tax strategies you should look into, we encourage you to contact Accounting & Tax Professionals, PLC and we’ll be happy to assist you with your end of year taxes in Des Moines, IA.

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How to Get Your Tax Returns Close to Zero https://thelocallineup.com/how-to-get-your-tax-returns-close-to-zero/ https://thelocallineup.com/how-to-get-your-tax-returns-close-to-zero/#respond Fri, 04 Oct 2019 15:53:00 +0000 https://thelocallineup.com/?p=330 How to Get Your Tax Returns Close to Zero Read More »

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Getting zero taxes back might not seem like the most attractive idea if you’re used to getting sizable returns. However, there are some benefits to zeroing out your return. It means you’ve paid exactly what you owed in taxes throughout the year, and weren’t essentially giving the federal government an interest-free loan in the previous 12 months. It also means you weren’t shorting the government and finding yourself with a sudden unexpected tax liability at the end of the year.

A relatively low percentage of tax filers achieve a zero bill on their return, whereas you can expect about 70 percent of tax filers in a given year to overpay, which makes them eligible for a refund. Rather than getting that refund back during tax season, you can make it your mission to never give up that money at all, putting it to good use throughout the year.

What to know about getting your return to zero

Your first step will be to estimate what your total tax liability will be in advance. This process should be fairly simple if you have a set salary, because you already know what your income for the year will be. However, if you’re an hourly, seasonal or self-employed worker, you’ll have to make your best guess as to what your income will be based on your earnings history.

Once you have a sense of how much money you’ll owe in taxes at the end of the year, you can then determine how much money you’ll need to withhold during each pay period so you can get down as close to zero as possible on your return.

If you haven’t been withholding enough taxes, then you should fill out a new W-4. On line 6, which indicates the additional amount you want to withhold from each paycheck, you will put the difference between what you are paying each period and what you should be paying each period. This is going to be a more accurate way of getting close to zero than adjusting your number of withholding allowances.

If you’ve been overpaying and need to take some money back for each pay period to get closer to zero, then you can try increasing the number of your withholding allowances. However, you must have a legitimate reason for doing so. If there is no reasonable basis for increasing your withholdings, the IRS can fine you. There are even criminal penalties that can result from providing false information on your taxes.

You should also make sure you’re at least paying enough taxes throughout the year to avoid additional interest or penalties. The last thing you want to do is actually increase what you owe the federal government as a result of poor tax planning.

For more information about the steps you should take to get your tax return as close to zero as possible, you should contact a reliable tax service in Des Moines, IA. Accounting & Tax Professionals, PLC has over two decades of experience—we’d love to meet with you soon!

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How Do Property Taxes Work? What to Know as a Homeowner https://thelocallineup.com/how-do-property-taxes-work-what-to-know-as-a-homeowner/ https://thelocallineup.com/how-do-property-taxes-work-what-to-know-as-a-homeowner/#respond Fri, 20 Sep 2019 15:59:00 +0000 https://thelocallineup.com/?p=335 How Do Property Taxes Work? What to Know as a Homeowner Read More »

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If you are a first-time homeowner, there is a lot of information you’ll need to learn quickly during the process of purchasing your house so you can make sure you meet all of your responsibilities. You will quickly learn, for example, all about property taxes: how they work, how you pay them, what they go toward and other such issues.

Here’s a quick overview of some of the most important things you should know about your property taxes in Des Moines, IA:

  • Assessments: Your property tax rate is based on the assessed value of your home, which is determined by a tax assessor. The assessor multiplies the assessed value of your property by the mill rate, a figure that refers to the amount per thousand dollars of assessed property value, then divides that resulting number by 1,000. So, for example, if there’s a mill rate of 7 percent on a residence with a $150,000 assessed value, then you’d have a $1,050 property tax bill.
  • Reassessment: Your home’s assessed value is subject to change, as tax assessors will periodically perform new assessments. The frequency with which reassessments occurs varies widely from area to area. During the reassessment, the assessor will compare your property to other similar properties that recently sold in the area and determine whether your property is more or less valuable than them.
  • Timely payments: You should make sure you always pay your taxes on time, as failure to do so could result in additional interest or, in severe cases, the local government putting a lien on your home. If you sell your home while there’s still a lien on it, proceeds from the sale will have to be used to pay off that lien.
  • Deductions: Property taxes are deductible from your federal income taxes if you itemize, so make sure you keep track of your payments. If you pay off your taxes with an escrow account, only the amount of money that actually went to the government can be deducted, not the amount of money you put into the account (if they differed).
  • Appeals: If you believe your property tax assessment is unfair or incorrect, you can appeal that value. Here again, your home will be compared to other properties in the same general classification in your immediate area (this means homes that are the same age and size and have other similar amenities that affect the assessed value).
  • Local issues: The funds from your property taxes are used to pay for schools and public services, such as libraries, police and fire departments and streets. When there are referendums in your area, generally there are potential property tax increases at stake. When you go to vote, you get to decide whether or not it’s worthwhile to you to increase your property taxes for the proposed service boosts.

For more information about the workings of property taxes in Des Moines, IA, we encourage you to contact the team at Accounting & Tax Professionals, PLC today. We’d be happy to provide the information and advice you need!

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Tax Allowances Explained: What Are Tax Allowances? https://thelocallineup.com/tax-allowances-explained-what-are-tax-allowances/ https://thelocallineup.com/tax-allowances-explained-what-are-tax-allowances/#respond Wed, 11 Sep 2019 16:05:00 +0000 https://thelocallineup.com/?p=340 Tax Allowances Explained: What Are Tax Allowances? Read More »

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Withholding allowances help an employer determine how much money to take out of an employee’s paycheck to remit to the state and federal tax authorities. You’ve probably filled out a W-4 before: when you check off allowances, that tells your employer just how much to withhold. The more allowances you claim, the less tax is withheld.

Withholding is based on your filing status: single, married or “married, but withhold at the higher single rate.” It’s important to figure out just how much you should withhold so that you neither over- nor underpay your tax bill—no one wants that kind of surprise!

We’ve broken down the basic tenets of a withholding allowance in Des Moines, IA for you, but if you need further help, don’t hesitate to contact the experienced team at Accounting & Tax Professionals, PLC:

  • How to calculate your withholding allowances: The IRS provides resources for calculating your tax withholding needs, including a personal allowances worksheet and an allowance calculator. Allowances take into account your marital and employment status, as well as how many children you have. Allowances also depend on how many jobs you have, whether you itemize your deductions and whether you have any other dependents who are not minor children. Personal deductions are no longer allowed.
  • Exempt status: You can claim exempt status on your tax withholding, but only if you can prove that you had a refund of all federal tax that was withheld because you didn’t actually have tax liability. This requires you to declare it annually.
  • Recalculate whenever your situation changes: Got a new job? Got married or divorced? Had a new baby? It’s time to recalculate your withholding allowances, and you can do that by submitting a revised W-4 to your employer. You’ll want to do this as soon as possible, because it won’t take effect until the payroll period 30 days after the revised form was received. Another option, if you’re not claiming any allowances, is that you can ask your employer to withhold a specific dollar amount per month. This will help you proactively stay on top of your tax liability.
  • If you claim too many or not enough allowances: Claiming too many allowances may get you into trouble at tax time—you could not only be hit with a huge tax bill, but you could also be hit with a penalty for claiming too many allowances. Yikes! On the other hand, if you overpay each month, you’re essentially giving the federal government an interest-free loan. That money would be better used in your hands, which is why it’s important to talk to a tax professional. With expert guidance, you’ll hit the right balance for your lifestyle and needs.

For all of your tax and accounting needs in Des Moines, IA, talk to the tax experts at Accounting & Tax Professionals, PLC. We can help you make smart choices and get the biggest refund for your taxes. Get in touch with us today to start planning for tax time!

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What Can You Do if You Owe on Your Taxes? https://thelocallineup.com/what-can-you-do-if-you-owe-on-your-taxes/ https://thelocallineup.com/what-can-you-do-if-you-owe-on-your-taxes/#respond Wed, 28 Aug 2019 06:04:53 +0000 https://thelocallineup.com/what-can-you-do-if-you-owe-on-your-taxes/ What Can You Do if You Owe on Your Taxes? Read More »

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What happens if you owe on your taxes and don’t pay by tax day? You could face penalties and interest from the IRS, and no one wants that kind of attention. No matter what you do, don’t ignore the problem. Even if you can’t pay the full amount on tax day, you’re better off filing for an extension and looking at your options.

When you fail to file, you’ll be hit with a 5 percent penalty that continues every month until you file—up to 25 percent of your total unpaid tax bill. If your failure to file is due to fraud, that penalty increases to 15 percent. The failure to pay penalty starts at 0.5 percent of your balance due per month, and is capped at 25 percent of your unpaid taxes. This can all add up fast, and before you know it, you could be looking at a very hefty bill. If you owe taxes or need tax debt help in Des Moines, IA, consult a professional at Accounting & Tax Professionals, PLC.

Here are some of the options you can consider if you owe taxes:

  • Set up an installment agreement: The IRS will allow you to pay your tax bill on an installment plan. The terms will depend on how much you owe and how soon you estimate you can pay, but there are options for low-income taxpayers. You do need to apply for the payment plan, and should be aware that there is a spectrum of fees involved.
  • Request a short-term extension: If you think you can pay your bill within 120 days, apply for a short-term extension. This reduces the late fee to 0.25 percent per month, and interest is charged at 3 percent until the balance is paid. If you don’t pay it on time, of course, the IRS reserves the right to void the agreements.
  • Request a hardship extension: If paying the taxes you owe would be a financial hardship—at least in terms of how the IRS defines it—then you may be eligible for a hardship extension. There are no penalties involved, but the 3 percent interest rate will still apply.
  • Borrow the money, or use credit: Finally, there’s one last option: borrowing the money. Credit cards can help you, but be careful to check the interest rate if you won’t be able to pay it off before the bill is due. You can also borrow against your 401(k), but that’s capped at 50 percent or a maximum of $50,000, depending on your plan. And there are always personal loans from banks or family members, but we suggest reviewing any fees and interest thoroughly before agreeing.

If you owe taxes in Des Moines, IA, your best course of action is to consult a trusted tax professional today. Contact the team at Accounting & Tax Professionals, PLC. We offer tax debt help in Des Moines, IA, along with a host of other personal finance and tax services. We can help you find solutions to your tax problems.

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Tax Saving Tips for the Next Year https://thelocallineup.com/tax-saving-tips-for-the-next-year/ https://thelocallineup.com/tax-saving-tips-for-the-next-year/#respond Sat, 10 Aug 2019 04:30:15 +0000 https://thelocallineup.com/tax-saving-tips-for-the-next-year/ Tax Saving Tips for the Next Year Read More »

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Want to save some money on your taxes next year? Of course you do—doesn’t everyone? Our tax service in Des Moines, IA works with a variety of clients of all different income levels and financial backgrounds to help them cut their tax liability and continue to build their savings.

Here are just a few examples of some of the strategies you can implement in your tax preparation to make sure you cut down your liability in the coming year.

Income deferrals

Your income gets taxed in the year you receive it, not the year you earn it. So, if you have the opportunity to defer any of your income into next year, it might make sense to do so if cutting your tax liability is going to be important to you. If, for example, you’re going to get a year-end bonus, you might consider waiting to receive that bonus until the calendar flips over.

This is a bit easier to accomplish if you’re self-employed or work as a consultant or freelancer. You can delay when you bill your clients into January if you performed work for them in December.

Deductions

You could potentially accelerate some deductions this year if you qualify for them. Donate some of your appreciated stock or property to a charitable organization. If you’ve owned that asset for more than a year, you can get a double tax benefit from that donation by deducting the market value of the property on the date of the gift—that means you’ll also avoid capital gains taxes on the appreciated value of the item.

Just make sure you get receipts to back up any charitable contributions you make, even if they are small amounts. In the event of an audit, you’ll need to have some records indicating you gave money or valuable property to the organization in question.

Sell losing investments

If you know you got some capital gains throughout the year but don’t want to have to worry about the capital gains taxes, you can offset some of those gains by selling some investments you believe to be duds. This means you can get rid of some of those losing investments now before they get worse, and minimize the amount of money you’d have to pay on your investments that are doing well.

Max out your retirement account contributions

Tax-deferred retirement accounts give you a way to cut down on your taxable income while still allowing that money to grow for the future. If you’re able to put the maximum amount of money allowed into a 401(k) in a given year, you’re going to set yourself up really well for your future and will also be able to significantly cut down on the taxable income you have for a given year, especially when you consider the maximum is close to $25,000 if you’re over 50 years old.

These are just a few examples of some of the strategies you can implement in your tax planning to save on your taxes next year. For more information, or to schedule an appointment with our tax service in Des Moines, IA, reach out to Accounting & Tax Professionals, PLC today.

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Getting Your Tax Refund Close to Zero https://thelocallineup.com/getting-your-tax-refund-close-to-zero/ https://thelocallineup.com/getting-your-tax-refund-close-to-zero/#respond Sat, 27 Jul 2019 04:30:09 +0000 https://thelocallineup.com/getting-your-tax-refund-close-to-zero/ Getting Your Tax Refund Close to Zero Read More »

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It can be a sinking feeling to look at your tax paperwork after you file and realize that you still owe Uncle Sam a significant amount of money. If you know you’re not going to be getting a tax refund this coming year, you can at least make an effort to get your tax liability as close to zero as possible so you aren’t stuck with an unexpected tax bill early next year.

So, what exactly can you do to get your tax liability down to nothing (or nearly nothing)? Here are a few tips to consider from our tax service in Des Moines, IA:

  • Collect all the documentation you have: Arming yourself with information is the first step you should take when analyzing your tax situation and determining what you can do to get down close to a zero liability. You’ll need documents like past tax returns, some past pay stubs, information about your retirement plan or health savings plan, information about mortgage payments or points and anything else that may affect your taxes.
  • Calculate: You can go online and find a variety of sources that offer tax withholding calculators. In fact, the Internal Revenue Service (IRS) website offers one for free, but there are other personal finance sites that will also provide this service. You’ll need this calculator to get an estimate of how much your tax liability will be in the coming year.
  • Data: Put all of the relevant data into the tax liability calculator. You’ll need to put in information such as income estimates (employee and non-employee), retirement plan and health savings plan contributions, compensation in the form of unemployment or other government benefits, tax withholding amounts and anything else the calculator might ask for, such as medical expenses or other itemized deductions. Note that the vast majority of tax filers these days will simply take the standard deduction, especially since it was doubled under the Tax Cuts and Jobs Act of 2017.
  • Analyze the result: After you’ve punched in all of the relevant information, you’ll get a resulting income tax figure. You can divide that figure by the number of pay dates you have to determine the paycheck withholding you’d need to have at each pay date throughout the year to get your tax liability as close to zero as possible. This may mean increasing your income tax withholding each period by a bit. But if your goal is to get to the end of the year and not have to pay any additional income tax, then it’s best to spread it throughout the year rather than getting hit with a single lump sum payment during tax season.

Need more tips about how you can reduce your tax liability? A trusted tax preparation specialist in Des Moines, IA can provide you with more information about the various deductions and tax credits for which you qualify, as well as the variety of different tax planning strategies you can implement to give yourself the best results on your tax return at the end of the year.

Contact Accounting & Tax Professionals, PLC today with any questions you have and we will be happy to give you any additional information you need. We look forward to working with you and helping you reduce your tax liability over the course of the coming year.

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Tips for Managing Your Receipts for Your Taxes https://thelocallineup.com/tips-for-managing-your-receipts-for-your-taxes/ https://thelocallineup.com/tips-for-managing-your-receipts-for-your-taxes/#respond Mon, 15 Jul 2019 03:41:00 +0000 https://thelocallineup.com/tips-for-managing-your-receipts-for-your-taxes/ Tips for Managing Your Receipts for Your Taxes Read More »

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With all of the changes to the tax code as a result of the implementation of the Tax Cuts and Jobs Act, you may be confused as to how this affects your potential write-offs, and the information you need to track as part of your tax preparation. As a general rule, it’s still a good idea to hold on to as many receipts as you can on the off chance that they’ll be helpful to you come tax season.

While the new tax system has resulted in more people taking the standard deduction and fewer people itemizing, our tax service in Des Moines, IA believes it’s still worthwhile to at least keep your receipts and see the kind of potential you have for savings once the tax season arrives. Here are some of the categories of receipts you should be sure to hang on to.

Medical expenses

Exactly what types of medical expenses qualify for deductions on your personal income tax return? Some examples include:

  • Premiums for your healthcare plans, including medical, dental, vision, long-term care, Medicare Part B and D and any other insurance you’re not reimbursed for and that is not paid with pre-tax dollars
  • Copayments for your medical, dental or vision care
  • Costs of prescription medication, contact lenses, breast pumps, eyeglasses, lactation aids, hearing aids, wheelchairs, braces, guide dogs, medical aids and medical examinations
  • Chiropractic services, psychiatric or psychological sessions, occupational and physical therapy and acupuncture
  • Nursing care and hospital stays
  • Weight loss programs
  • Transportation, parking and tolls for trips to and from appointments with medical professionals, as well as transportation via ambulance to medical facilities

Childcare

There are still deductions available for childcare, which means you could potentially save quite a bit of money by holding on to all of your paperwork and receipts to use during tax season. You could qualify for child or dependent care credits if you pay a daycare, babysitter, afterschool program or day camp. If the care is in your own home, such as by a maid, cook, housekeeper or nanny who also works with your child, you could qualify for additional deductions.

Keep in mind, though, that these deductions and credits are only available if you were paying for them to enable you and your spouse to work or look for work.

Work expenses

If you have any work expenses that are not reimbursed, you are able to deduct those expenses on your taxes, including costs of equipment, office supplies, tools, required uniforms (that you can’t wear outside of work), protective gear, professional dues (such as union membership), subscriptions to professional magazines or journals and other expenses paid as part of your employment.

There are also self-employment expenses you can deduct, including materials, supplies, marketing, expenses paid for renting office space, travel expenses, insurance and more.

For more information about what you can and cannot deduct and when you should hold on to your receipts for your tax preparation, reach out to our tax service in Des Moines, IA to schedule a consultation.

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Tips for Using Tax Calculators https://thelocallineup.com/tips-for-using-tax-calculators/ https://thelocallineup.com/tips-for-using-tax-calculators/#respond Wed, 10 Jul 2019 03:41:31 +0000 https://thelocallineup.com/tips-for-using-tax-calculators/ Tips for Using Tax Calculators Read More »

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You’ve probably come across online tax calculators before. However, if you don’t know exactly how income tax is calculated, then they probably aren’t going to tell you a whole lot. So how exactly is your income tax calculated, and what can you do to lower the amount of money you owe to the government? Here’s some helpful information from our tax service in Des Moines, IA.

Tax brackets

The way your taxes are calculated depends on the tax bracket in which you fall. It’s worth noting that “tax bracket” and “tax rate” don’t mean the same thing. There’s a misconception that if, for example, you fall in a tax bracket that taxes at 30 percent, that means you give up 30 percent of your income. However, that’s not true—you’d only be taxed 30 percent on the amount of income you have that falls within that bracket. This is what’s called a “marginal” rate.

Let’s say, for the sake of this example, that there are tax brackets A, B, C and D that tax at five, 10, 15 and 20 percent. Bracket A covers income from $0 to $25,000, B covers $25,000 to $50,000, C covers $50,000 to $75,000 and D covers $75,000 to $100,000. If you made $80,000 in a tax year, only $5,000 of that would actually be subject to the highest tax rate. The other portions would be subject to the first three rates.

Income

Tax calculators will, of course, consider your income. This includes earned salaries, wages and other types of compensation, such as investments and rental properties. Your adjusted gross income (AGI) is the amount of taxable income you have after subtracting IRA or HSA contributions and other exceptions.

Filing status

Your filing status also influences how your taxes will be calculated. You can file as Single, Married Filing Jointly, Married Filing Separately, Head of Household or Qualifying Widow(er).

Deductions and credits

While the Tax Cuts and Jobs Act did eliminate a lot of deductions that previously existed in the tax code and boosted the standard deduction to the point where fewer people itemize than ever before, it does still make sense for some people to track their deductions, all of which will affect how your income taxes are calculated.

While deductions lower the amount of taxable income you have, credits are dollar-for-dollar reductions of the amount of income tax you owe based on your eligibility. In some instances, these credits are refundable, which means you’ll get paid amounts of the credit that are greater than your tax liability. Some credits have recently changed, such as the child tax credit, so it’s important to go over the existing credits with your tax service in Des Moines, IA and check your eligibility. Regardless, you can bet that these credits and your eligibility for them will factor into calculations.

For more information about how your income taxes are calculated and what the numbers that come out of an income tax calculator actually mean, contact the team at Accounting & Tax Professionals, PLC today.

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