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Life Changed but your W-4 Didn’t: Why You Need to Update Your W-4 Withholding

If you paid a large tax liability bill after filing your taxes, you might want to update your W-4 Form.

Are your friends on a summer vacation (thanks to their tax refund checks) while you’re stuck at home because you were forced to write a check for your tax due?

If you ended up writing a large check to the IRS for the total of your tax liability, it’s good to know that you’re (somewhat) in control of  what that total will be next year. Surprisingly, it isn’t some randomly generated number, nor is it based on luck. In fact, it’s linked to the number of allowances listed on your W-4 form. That means, you’ll want to take a look at the number reported on your W-4 Form.

What a W-4 Form Is & How it Affects your Tax Refund

For those of you unsure of what a W-4 form is- it’s one of the forms you were handed upon your first days of employment at your job. To be more precise, a W-4 form is used by your employer to determine the amount of taxes to be withheld from your pay. The number of exemptions claimed on it directly affects your tax refund or tax due.

Continue reading “Life Changed but your W-4 Didn’t: Why You Need to Update Your W-4 Withholding”

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Tax Filing Tips Every Parent Should Know

If parenthood could be summed up in one word, that word would be responsibility. Being a parent means not only are you responsible for yourself, but also another human being.

With new responsibilities comes new pressures. However, RapidTax wants to help take that pressure off your shoulders, at least when it comes to the responsibility of filing your taxes.  That’s why we have created this list of top tax tips for parents filing taxes. These tips will not only save you money, but also save you time when filing your taxes.

How to Increase your Tax Refund when Claiming Your Child:

The credits below apply to you if you are claiming a child on your taxes. Be sure to read through the entire list or you might mix some extra tax dollars!

1. Each child is a dependent exemption: When filing, each child you claim is counted as a tax exemption of $3900.

2. Claim the Child Tax Credit: For each child you claim (under the age of 17), there is a non-refundable tax credit of $1000. This credit is phased out if your modified adjusted gross income is over $75,000 if your single or over $110,000 if married filing jointly.

3. Child Care is a Tax Credit:  The Child and Dependent Care Credit allows filers to claim up to $1,050 of child care related expenses paid for one qualifying dependent, as long as the child is under 13 years old. Did you spend money on child care expenses for two or more children? You can claim up to $2,100 for two or more dependents with this credit. Continue reading “Tax Filing Tips Every Parent Should Know”

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How To File Taxes for the First Time

If you’re filing your taxes for the first time, you’re most likely a college student, have your first job and probably not overly excited about it.

In fact, your parents might have been nagging you since January to file by April 15th. But let’s be honest, you don’t exactly know where to start.

All that aside, RapidTax understands and we’re here to help you through the process. If you need help filing taxes for the first time, here’s what to do.

Before Filing:

  • Get Organized: Gather your W-2s, 1099s, 1098-E (this shows the interest you paid on student loans), 1098-T (tuition payments and qualified expenses), etc.
  • Know Your Filing Status: There are many filing statuses; Single, Head of Household, Married Filing Jointly, or Married Filing Separately. Most likely, if your filing status may just be Single.
  • The Standard Deduction vs Itemizing: Everyone who files has the option to take one of two tax deductions; itemized deductions or the standard deduction. Itemizing deductions means you will list all your eligible deductions, and the combined total is deducted from your taxable income. Most are only eligible for the standard deduction. This amount depends on your filing status. Continue reading “How To File Taxes for the First Time”