Preparing for tax season
Tax season is upon us once again, and though April is still a couple months away I know many of you like to get a jump on filing your returns in order to beat the stress of deadlines – and maybe even get some extra money in your pocket a little faster.
As you might recall, the legislature is facing a big discussion about tax conformity. Last session we wrapped up a great tax conformity bill that would have squared away the differences between our state tax code and changes made by President Trump and Congress. That bill would have updated our code and cut taxes for 82% of Minnesota taxpayers of all income levels. Everyone else would have been protected from unintended increases.
Last year we sent a highly popular tax conformity bill to the governor with bipartisan support, but the governor vetoed it. That veto resulted in additional costs to residents and businesses in Minnesota, as well as to the Department of Revenue as they prepared for this year’s tax filings.
Meanwhile, you may have heard that there could be complications when you file your return this year. Those complications were expected because the federal government eliminated most itemized deductions and expanded the standard deduction. Typically if you claim the standard deduction federally you have to do the same in Minnesota; given the unique situation, Minnesota officials are allowing filers to choose between the standard deduction or itemizing, regardless of what you do with your federal returns.
This will spare tax filers some headaches, but does not solve all our problems. That is why tax conformity will continue to be such a pressing issue this year.
If you’re one of those who like to get an early start on your returns, you may find the following tips handy.
- You might be eligible for free e-filing. Last year, about 90% of Minnesotans filed their returns electronically, but a lot of people don’t know they can do so for free. Last year, 800,000 Minnesotans could have filed for free but didn’t. Determine if you’re eligible by visiting the Department of Revenue’s e-filing website at http://ow.ly/1RhF30neEkX.
- You may also qualify for free tax preparation assistance. If you are age 60 or over, have a disability, speak limited English, or have an income less than $55,000 per year, you may be able to get help preparing your returns for free. There are more than 200 free tax prep locations; find the one closest to you on the Department of Revenue’s free tax prep website: http://ow.ly/1YRD30neEpH.
- Be vigilant against fraud and identity theft. Unfortunately, identity theft is becoming more and more common. It is a good idea to make yourself aware of the tricks that scammers use. For example, the IRS will never call you to demand payment, demand you pay taxes without an opportunity to question or appeal, require you to pay using a specific method, ask for a credit card over the phone, or threaten to have you arrested for not paying. For more information on common scams and how to protect yourself, visit the IRS’s fraud website: https://www.irs.gov/identity-theft-fraud-scams
If you have any questions about these resources, please don’t hesitate to reach out. My phone number is 651-296-5612 and my email is email@example.com.