GOBankingRates’ Live Richer Speaker Series is an exciting opportunity for me to introduce the financial experts and influencers in my network to a wider audience, and get invaluable tips and advice about everything from taxes to investing. The program was kicked off with a presentation from Kathy Pickering, H&R Block’s vice president of regulatory affairs and executive director of The Tax Institute, who answered your most burning questions about taxes.
Related: 8 New or Improved Tax Credits and Breaks for Your 2020 Return
When is it worth to pay someone to prepare your taxes?
From my perspective, it’s always worth it to pay somebody to prepare your taxes. That said, whenever you’re going through a significant life change, that’s the time when you want to consider getting help with your taxes. So, if it’s the first time you’re filing, you want to work with a professional and get that objective advice and get educated on what are the things that you need to know. Then, whenever you have a big change like buying a house, getting married, having a baby, those kinds of things really have a lot of tax implications, and you don’t want to miss out. So that’s a great time to get help.
Learn: How To Itemize Deductions Like a Tax Pro
How can I lower my taxable income?
For lowering your taxable income, you still have one more thing that you can do before the tax deadline, and that’s contribute to an IRA. That’s a really cool thing. (You can contribute) up to $6,000 if you’re under 50, up to $7,000 if you’re over 50, and that’s taking that money off the top, so it’s lowering your taxable income — and you’re saving for retirement, which is really good thing to do.
What are the most common tax deductions that everyone should take advantage of?
Some of the most common tax deductions are dependent on where you are in your life. If you have kids, you need to be looking at all of the opportunities to claim, (including) childcare expenses and the child tax credit. If your child is older than 17, there’s now the new other dependent credit. There are a lot of child and family credits that are available. If you’re in school, there’s the American Opportunity Credit for the first four years of college. That’s up to $2,500 to help offset your tuition expenses. And now with tax reform, there’s this new 20% business income deduction that’s available for self-employed, freelancers and small business owners. There are a lot of different things that you need to get smart on depending on what your situation is, because you don’t want to miss out.