USECU Details How to Take Charge of the Upcoming 2022 Tax Season

By Carl Norcott.
Updated Feb 15, 2022

SAN DIEGO, Calif. (PRWEB) February 15, 2022 - Its a new year, and that means hope for brighter days, an effort to achieve new goals, and something most dont look forward to tax season. The good news? Getting ready for tax season doesnt have to be so stressful and overwhelming. By taking a few steps to prepare and exploring options for reducing taxes and preparation costs, tackling this item on the to-do list confidently and timely.

Having a game plan for tax season is a must and it can be a lot like a football kick-off return, said Matt Lyons, Executive Vice President and Chief Operating Officer at USE Credit Union. Knowing what Xs and Os is just the start. One needs to pay special attention to the details to be able to accurately maneuver them into the proper places and maximize a return. The great news is that putting together a tax game plan is replicated each year, and this can make the annual tradition be a breeze.

Avoid the April Scramble Lessen the stress of tax time with a little preparation, starting now. What to do to streamline the filing efforts? 1. Start early. The deadline for filing a 2021 tax return is April 15, 2022, but get started on filing well before that. The deadline for employers to mail out W-2 forms and other wage statements is February 1st. 2. Decide how to file. There are more options than ever for filing taxes this year due to ongoing precautions surrounding COVID-19. Do:

3. Know about new tax rules and potential deductions first. Some things to know for this year include:

4. Organize records. For the 2022 filing, the IRS advises to gather all relevant tax records as soon as possible to ensure everything is in order and to not overlook potential deductions or credits. Heres a list of forms that can help get started:

5. Keep information secure. In addition to storing tax documents in a safe place, practice extra caution when handing them off and especially when sending them electronically. Ask an accountant or tax preparer where any personal data will be stored, who has access to it, and how a preparer will share forms and information with any party. Avoid sending sensitive financial documents via email and instead use an encrypted file-sharing system with multifactor authentication.

Theres Still Time to Save Money

While everyones tax situation is different, and consulting a tax advisor is always recommended, here are a few ways to possibly save on 2021 taxes.

1. Fund a retirement account. Though 401(k) contributions were due by the end of 2021, one still has until April 15, 2022, to contribute to a traditional IRA or a Roth IRA. Making a deductible contribution helps to lower a tax bill by reducing the taxable income while contributing to a tax-deferred IRA account. To qualify for the full annual deduction on a traditional IRA, one (and their spouse, if filing jointly) must:

For both traditional and Roth IRAs, the IRA contribution limits for 2021 are $6,000 if for adults under the age of 50 and $7,000 for those who are 50 or older.

Contributing to a Roth IRA will not reduce a 2022 tax bill, as these contributions are made after tax (all qualified withdrawals from a Roth IRA can be tax-free when retired, while withdrawals from a traditional IRA are fully taxable). To contribute the full $6,000 or $7,000 to a Roth IRA, one must earn $129,000 or less individually or $204,000 when married and filing jointly.

Ones tax savings will depend on a variety of factors, including how much to contribute to the plan, the tax bracket, and how long and how much invested money is able to grow.

2. Itemize deductions. Savings may be found when itemizing instead of taking the standard deduction of $12,550 for individuals or $25,100 for married couples filing jointly. Mortgage interest, charitable donations, and medical expenses making up more than 7.5% of an adjusted gross income are some examples of these itemized deductions.

3. File and pay on time. Avoid late filing penalties by filing a return by the tax deadline, April 15, or by filing Form 4868 to get an extension until Oct. 15. This form asks the filer to estimate their total tax liability, subtract how much has already been paid, and pay the balance. Otherwise, the failure-to-file penalty is 5% of the unpaid taxes for each month or part of a month that a tax return is late. The penalty wont exceed 25% of the unpaid taxes.

About USE Credit Union Founded in 1936, University & State Employees Credit Union (USECU) empowers nearly 60,000 members to achieve financial wellness through a full range of financial products and services, including checking and savings options, credit cards, loans, mortgages and more. USECU now has more than $1.3 billion in assets and offers accessibility to its members through eight branches in California, nearly 30,000 surcharge-free ATMs across the nation and 24/7 online and mobile Banking access.

USECU membership is open to all California university employees and students as well as California state employees, along with others who live, work or worship in Alameda County, Sacramento County, San Diego County, Santa Clara County and Yolo County. As a not-for-profit community leader, USECU partners with causes, events and organizations that reflect a commitment to health, wellness and inclusiveness. Learn more at usecu.org.