Tax season has begun: Here's how to get the most back on your return
BOSTON - Monday is the official start of tax season, which means it's the first day the Internal Revenue Service will begin accepting tax returns.
The IRS is expecting to process more than 128 million tax returns this year.
Laura O'Brien is a Tax Partner with LGA, a New England based CPA and advisory firm. She told WBZ that preparation starts with making sure you all have all of the necessary documents.
"Don't delay, don't procrastinate—just stay on top of things. And once you've got the significant amount of information gathered, you either bring that to your tax preparer or start the process yourself," O'Brien said.
Let's discuss the details of tax credits and tax deductions, starting with the difference between the two.
"Tax credits are more valuable, because it's a dollar-for-dollar reduction on how much tax you owe. A tax deduction is going to reduce your income, which is then taxed," O'Brien explained.
Truly understanding the credits and deductions that you qualify for can make all the difference when it comes to getting the most back on your return.
Let's look at what's new with tax credits this filing season.
"Governor Healey signed a tax relief bill in October of 2023 and included in this were three main changes," O'Brien said.
The changes are:
- The change for the Short Term Capital Gains Tax. Here's what this means for you: if you sold assets in less than a year – they will now be taxed at 8%, instead of 12%.
- There was also a change in the Estate Tax. Massachusetts is now taxing your estate beginning at $2M.
- With the new Millionaires Tax, there's an extra 4% surcharge on any income over $1M.
Here's a look at the deductions that are new this year:
- Massachusetts created a new tax credit for dependents that's now $440 in 2024.
- There's an increase in rental deduction to $4,000
- There's an increase in the Septic System Tax Credit to a maximum of $18,000.
"And if you're doing any home improvements this year, or last year, you'll want to check energy.gov and here you'll see what type of home improvements that will qualify for that," O'Brien added.
Yolanda Rego a Tax Manager at LGA said that even though the IRS has improved the process since COVID, there is still a delay when it comes to filing paper returns.
That's why she recommends electronic filing, so you can get your refund back sooner.
"And another thing that I think is a misconception with people is that when they owe taxes, that if you do it sooner, you have to pay it sooner. So, I think that's why everyone waits to get their information to us by April 15th," Rego told WBZ.
That means even if you get your taxes done early, you still have until April 15 to make the payment.
And if you get that tax bill back and it's higher than you expected, don't ignore it.
"Take a deep breath, don't ignore, file your return with as much as you can, and then contact the IRS to get into a payment plan," O'Brien said.
On average, the IRS said it takes less than 21 days for you to get your refund.
However, if you have questions or concerns about what you have not received your refund after 21 days click here or download the IRS app.
The tax deadline is April 15, 2024. However, if you live in Massachusetts or Maine, they'll be due on April 17th, because of state holidays
