Financial Freedom: Frequently asked tax questions

The April tax filing deadline is looming and a lot of us are turning our attention to getting our finances in order and taxes completed.

To help us get started, Kenyata Mccoy and Kathy Werner from My Personal CPA and Financial Planner answer frequently asked questions from our viewers.

What’s the difference between an exemption, credit, and deduction?

Exemptions, deductions, and adjustments are all reductions to your income before your tax is calculated, whereas a credit is a deduction to the actual tax liability.

I’m married, but I want to file my taxes separately because my spouse and I keep our finances separate. Is that okay?

You should seek out a tax professional to run different scenarios to get the complexities of your situation and determine whether it’s really in your best interest. By doing so, you tend to forfeit a lot of credits and deductions.

What should I do if I made a mistake on my federal return that I’ve already filed?

File an amended return immediately. Depending on the tax year, you could encounter restrictions that limit the refund you receive for any overpayment. Tax professionals can check your past filings to see if they were accurately prepared.

Should I file online or see a tax professional?

If your tax situation is simple, it can be more cost-effective to prepare your taxes yourself. However, if you are confused by the questions or feel overwhelmed, seek out a tax professional to ensure your filing is accurate and maximize your benefits.

Click here for more information from My Personal CPA and Financial Planner.

Editor’s Note: The filing deadline to submit 2016 tax returns is Tuesday, April 18, 2017, rather than the traditional April 15 date. In 2017, April 15 falls on a Saturday, and this would usually move the filing deadline to the following Monday — April 17. However, Emancipation Day — a legal holiday in the District of Columbia — will be observed on that Monday, which pushes the nation’s filing deadline to Tuesday, April 18, 2017. Under the tax law, legal holidays in the District of Columbia affect the filing deadline across the nation.

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