Giving Thanks for Tax Refunds—Tax Guidance for the Pilgrims That Applies Today11.26.13
A pilgrim’s life was never easy. They worked hard in harsh environments with untold risks and dangers. However, after all their efforts (and provided they survived the elements, wild animals, possible starvation, and other risks) it was time to celebrate. Hence the great and possibly best holiday of them all: Thanksgiving.
If the pilgrims were here today, their taxes would certainly be complicated. They would need to account for life changes, special tax considerations, deductions related to work activities, moving and commuting considerations and many other tax issues. Pilgrims would certainly have need of a professional tax return preparer.
And if pilgrims were around today, Tax Pros at Jackson Hewitt would likely be able to make their lives a little easier come tax time. Check out how some of the benefits you enjoy each tax season could have also benefitted one of our Pilgrim friends through the Q&A below:
It has been a crazy year! We moved (across an ocean). We built a house (out of logs). I got married, AND we had a baby! Will any of this affect my taxes?
Definitely! Life changes are important to take note of throughout the year. Hopefully you’ve saved all of your receipts. Let’s start at the beginning.
Deduct moving expenses
Since you moved to America to pursue your dream of owning your own farm, business or expanding your trade, you likely qualify to claim a moving expense deduction. The cost of your overseas transportation, and the cost to move your household goods to the ship would be deductible. Even if you don’t itemize, you could likely deduct your moving expenses.
Deduct home-building and mortgage costs
The costs of building your home establish the financial and tax cost basis of your home. So if you sell it down the road, you could reduce your potential gain by that amount—which will save you on taxes. If you took a loan out to build your house, loan interest is deductible (and so are your property taxes) as part of itemizing deductions. Even PMI or private mortgage insurance may be deductible on your tax return.
Change status, claim family deductions and adjust withholdings
Congratulations on your wedding! You will need to change your filing status this year to either Married Filing Jointly (MFJ) or Married Filing Separately (MFS), although filing jointly is most common. You also may need to change your withholdings since you have a much different tax situation with a family. Depending on your income, you may also be able to claim the Earned Income Tax Credit (EITC) and the Child Tax Credit and maybe even the Child and Dependent Care Credit.
So, while it’s been a crazy year, it looks like you’re going to have a great tax time!
I am most excited to get a refund. I can invest it in my farm, buy the baby new clothes and get provisions. How can I check the status of my refund?
There are a few great ways to keep track of your refund. One is through MyJH—a free and secure web-based tool. Not only can you upload, store and organize your tax documents like receipts, W-2s, 1099s, schedule an appointment with your neighborhood Tax Pro, but you can check your tax return and refund status 24/7! You can also visit the IRS website and take advantage of the “Where’s My Refund?” tool.
Being new to the country and focusing on survival, I haven’t opened a bank account. How can I get my refund?
You have several options. You can have your refund loaded onto the Jackson Hewitt Preferred Card*. It’s a safe, easy and convenient alternative to direct deposit. You can also get your refund as a paper check, although this comes with its drawbacks. You may have to pay a check-cashing fee or deal with a check that’s lost or stolen, and you have to wait for your check to arrive in the mail.
I started my own business this year. I’m not even sure where to begin as far as handling self-employment income and taxes. What should I know?
To start, be sure to keep track of your business expenses. For instance, if you started your own farm, you’d want to track tools, seed and supplies. If you bartered throughout the year (and as a Pilgrim, it’s likely you did) you need to track the value of the items you traded and received in order to accurately determine your total income for tax purposes. Under today’s tax code, the net profit from your business is subject to self-employment taxes and any remaining taxes owed will need to be paid when filing your tax. Taxes should, however, be paid in quarterly estimates, so as a business owner, you would need to determine your expected annual profit each quarter, along with self-employment taxes, and then send an estimated tax payment to the IRS. Any of this sound familiar? No matter what your tax situation, and whether you’re an old pilgrim or just a normal American with the complications and issues of daily life, the Tax Pros at Jackson Hewitt can help you come tax time. And if you have any questions throughout the year, feel free to give us a call!
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