Even though taxes will be due on Tuesday, April 18, it is not too early to begin the process to file, especially if you expect to receive a return. You will have to figure out whether to file your own taxes or have a tax specialist do them for you. Here is some helpful information to help you weigh these two options.
FREE TAX PREPARATION FOR SOME ELIGIBLE TAXPAYERS
“One possibility, if you qualify, would be to have your taxes prepared free through a program called Volunteer Income Tax Assistance (VITA),” said Brenda Petell, Director of volunteer engagement for the Berkshire United Way. Her organization is funding this Berkshire Habitat for Humanity program.
To be eligible for this free program, according to Petell, you must meet one of these criteria: have a family household with a gross income of $60,000 or less; be disabled or age 65 or older); or have limited English language speaking or reading skills.
The process begins by picking up an intake information sheet (or getting it online); completing it along with your taxpayer consent form, a four-question Massachusetts state form, and a Demographic Survey Sheet. Then, along with other tax related documents, you place them in a provided envelope. At this point, an IRS-trained volunteer will review and prepare your information, which will be filed with the IRS after it is double-checked by another IRS-trained volunteer.
This all happens before your appointment, when you can meet with one of the volunteers, who will go over the forms with you before they are filed with the IRS.
Among the factors that led to the establishment of this program, Petell said, was that many eligible taxpayers were not taking advantage of the Earned Income Tax Credit. This is a refundable tax credit for low- to moderate-income working individuals and couples, especially those with children.
There are several locations throughout the county, including Pittsfield, Great Barrington and Massachusetts College of Liberal Arts (Murdock Hall), where you can obtain these free tax preparation services. Hours and location may be found at bit.ly/40YitAJ or berkshirehabitat.org/vita. The program ends April 11, so make sure you do not wait too long to schedule an appointment.
In addition, Massachusetts residents who are eligible for the VITA program, may also prepare for their own tax filings using a program called My Free Taxes. The link for this is: myfreetaxes.com/.
TIPS FOR FINDING A TAX PREPARATION SERVICE
If you do not qualify for the VITA program and still do not want to prepare you own taxes, the next step is to find a tax preparation service. But, what should you look for?
Patrick Consolati, owner of Consolati Tax Prep in Lee, recommended that you want to find a tax preparation service that has an established record dealing with personal income taxes. His family business extends three generations where he sees not only return clients, but their children and grandchildren, as well. That’s why you want to look for a tax preparation service that has an excellent reputation in the community.
Having an experienced tax preparer is also important. “You don’t want to use a service, where the preparer has just completed a few weeks taking a tax preparation course,” Consolati said. “You want a firm with experienced tax preparation professionals.”
He gave an example of a client who was reimbursed for a completed class as part of a grant, but was given a form generally used for people who incur a business expense. Given his experience, he knew this reimbursement should be placed under “Other Income.” Sadly, some tax preparation services will put this on a Schedule C form primarily used for sole proprietorships — and add on a surcharge for their time.
Finding an ethical service is as important as experience. “You want a tax preparation service that is honest and does not take advantage of their clients by promising something that they cannot or should not deliver,” Consolati said. With over 20 years in the business, he said he would never jeopardize his reputation by preparing taxes that do not follow the letter of the tax codes, and he has turned away clients who “want him to look the other way.”
In addition, you don’t want to use a tax preparation service that makes claims that it cannot keep. “If a business promises you something that is too good to be true, it probably is,” he warned.
Consolati said he is also troubled by tax preparation firms that will advertise getting you an advance on your tax refund from their company’s funds, so you do not have to wait for the IRS to deposit it into your bank account. Then, upon receipt of your tax refund, you pay back this advanced money.
However, they fail to mention two things. First, they are charging you interest on that advanced payment or an additional fee, as if this was a loan. Second, with E-filing, many refunds take only 15-20 days, so it is not necessary to incur these unnecessary expenses.
DIY TAX PREPARATION SOFTWARE
Another option is to prepare the taxes yourself. There are several software programs that enable you to file your own taxes. In fact, some software allows you to file your own taxes and will provide online support. Some of the software is free if your taxes are not complicated, while others will offer free online filing regardless of your return’s complexity. Most will provide online support along with your purchase of their software package.
Here is a sampling of five of the more popular tax preparations software programs.
• Intuit’s TurboTax has a support service that is free with its tax preparation software, if you file by March 31 and you have a simple tax return. This also includes state taxes. However, if you have more complex tax issues like itemized deductions, unemployment income, stock sales or income related to crypto investments, it offers other discounted software packages. Information: bit.ly/3Izk6xr.
• H&R Block also provides software that, like TurboTax, has software for noncomplex tax returns. It’s software is being discounted, as well. Information: bit.ly/3xA3WO6.
• TaxSlayer is offering 25 percent off if you use its code SAVE25 through April 18. Depending upon your tax filing complexity, you may qualify for free software. Information: bit.ly/3SclKbD.
• Jackson Hewitt Tax Services, which has an office in Pittsfield, also provides online tax preparation services. It’s online service is $25, regardless of how complex your taxes are, according to a representative. Information: bit.ly/3k7DEj8.
• Cash App Taxes, formerly known as Credit Karma Tax, also is another possibility. Information: bit.ly/3kepeh9.
Since my policy is not to endorse any product or service, you will have to conduct your own due diligence before making your decision.
NEW TAX PROVISIONS FOR MASSACHUSETTS RESIDENTS
With new tax provisions enacted by the state Legislature, you may want to see how some of these codes will affect your tax preparation. Some of these changes in Massachusetts will mirror the newer federal tax laws.
Nathalie Dailida, director of office and legislative affairs for the Massachusetts Department of Revenue, taxpayers can refer to the DOR website link for the new tax code laws affecting their 2022 taxes. Information: bit.ly/3keXZ68.
Another Massachusetts Department of Revenue website which would be helpful in preparing your state taxes is: bit.ly/3IjEgKR. This website has links to help you e-file your state taxes, check on your refund status, along with a wealth of information which can save you money if you decide to file your own taxes.
Well, time to go … need to start gathering my own tax documents.
RX TIP FOR TAXES: Check out this IRS website, which lists common errors that taxpayers should avoid, especially if looking forward to a speedier federal tax refund: bit.ly/3Kn5JOo.