Still haven’t filed your tax return? You’re certainly not alone! According to the IRS, between 20-25% of taxpayers file in the two weeks before tax season ends. This year Tax Day is Tuesday April 17th.

While we’ll discuss a few last-minute ways to cut this year’s tax bill, surprisingly, the most important tax tips we can recommend…Start planning for next year’s taxes!

Since most provisions on the biggest tax overhaul in three decades took effect January 1st, learning the changes’ effects—especially on paycheck withholding and deductions—now could spare you from a surprise tax bill next spring.

Here are the most important steps to ensure a surprise free 2018 tax season, as well as some last-minute tax tips for this year.

Tax Tips For Your 2018 Returns

1. Project Your Taxes For 2018

Now is the perfect time to estimate your taxes for 2018 since you already have the necessary information right in front of you! If your income will stay about the same next year, plug the information from your 2017 return into one of the many online calculators. Many tax preparers are also providing clients with projections.

According to the Tax Policy Center, the majority of tax filers (about 65%) will see a lower tax bill in 2018, 6% will see a raise, and the rest will maintain the status quo.

2. Look At Withholding & Estimated Payments For 2018

Have you noticed a bump up in your paychecks this year? If so, it’s because U.S. officials have revised the tables employers use to withhold taxes from paychecks.

Since these changes are broad-based and imprecise, you’ll want to do some investigating for your specific situation. Even if you’re getting an overall tax cut, your withholding may need to be adjusted so you don’t owe a lot more than expected next year. You can use the new IRS withholding calculator to determine if you need to adjust your take-home pay.

If you make quarterly payments of estimated taxes, you should also see where you stand. See the IRS’s new Form 1040-ES for 2018.

3. Rethink Charitable Deductions

The huge changes in charitable giving laws altered exemptions, deductions and credits. Specifically, the number of taxpayers who are able to deduct charitable donations on Schedule A will go from about 36 million in 2017 to around 16 million in 2018.

If you don’t see yourself filing Schedule A every year, tax tips you may want to consider include “bunching” two or more years of charitable giving into one year to more easily qualify for your tax write-off.

Last Minute Tax Tips For 2017

1. Open Or Add To Your IRA 

You’re able to make an IRA (Individual Retirement Account) contribution right up until the deadline of April 17, 2018. You can contribute up to $5,500 for the 2017 tax year. If you’re over 50 years old, you can throw in an additional $1,000 as a catch-up contribution.

Remember, whether you’re able to deduct IRA contributions on your tax return depends on the type of IRA you have, your participation in your employer’s retirement plan and your income.

2. Make Final Contributions To Your HSA

If you haven’t completely funded your HSA (Health Savings Account) for 2017, there’s still time. You can make contributions up until April 17 – and still deduct it on this year’s return. Remember, this only applies to you if you set up your account by the end of 2017.

Need An Extension?

Finally, if you’re unable to meet the April 17 deadline to file your federal return, you can request an automatic six-month tax extension from the IRS. Use Form 4868 and file it electronically via the Free File link on IRS.gov.

Remember: An extension to file is not an extension to pay. You must pay 90% of your total tax bill by April 17, to avoid any late-payment penalties. An underpayment will incur an interest charge, which rose to 5% annually as of April 1.

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4 Tax Law Changes You Should Know

^{*Disclaimer: Citywide Home Loans does not provide tax planning services or any other service apart from lending. You should always consult with your legal, tax and financial advisors to determine which strategy is the most suitable for your specific circumstances.}

As you go through your financial documents during this tax season, you may find yourself wondering how long you should keep these documents. You probably know that certain documents like tax returns, bank statements, etc. need to be kept, but for how long and in what format?

This article will help you determine which financial documents to keep and the right time to discard the ones you should toss. Once you’ve identified the keepers, we’ll help you with the best way to safely store all that personal information.

How Long To Keep Financial Documents?

1. Documents To Keep Up To Three Months
Monthly utility statements, purchase receipts, credit card statements, deposit and withdrawal slips fall under this category. Unless you are self-employed and you need to keep business related documents or receipts for tax purposes, you can dispose of them as soon as you verify your payment was processed, or check them against any physical receipts or bank records that record your purchases.

If you’ve purchased something that applies to a warranty or tax claim, then keep those receipts with the warranties or taxes.

2. Documents To Keep For A Year
Keep a paper or digital copy of the past years’ worth of your monthly bank statements and cancelled checks. Additionally, hold on to your pay stubs to verify the accuracy of your Form W-2 when tax season arrives.

3. Keep Tax Documents For 3 – 7 Years
The IRS recommends keeping tax documents for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later, if you file a claim for credit or refund after you file your return. If you file a claim for a loss from from worthless securities or bad debt deduction, you should keep those records for 7 years.

Generally, you must keep your records that support an item of income, deduction or credit shown on your tax return until the period of limitations for that tax return runs out. Specific records that the IRS recommends you keep for tax purposes include bills, credit card and other receipts, invoices, mileage logs checks and other proof of payment and any other documentation that supports deductions or credits you claim on your return.

4. Financial Documents To Keep Permanently
Financial documents you should never get rid of are usually official papers from government agencies, involve lawyers, will be important to your family if you pass away, are related to something of significant value (like a jewelry appraisal), or are a pain to replace.

• Alimony, Custody or Prenuptial Agreements
• Birth and death certificates
• Divorce Decree
• House deeds and mortgage documents
• ID cards and passports
• Life insurance policy
• Loan documents
• Marriage license
• Military discharge papers
• Pension plan documents
• Social security cards
• Vehicle titles
• Wills, living wills, trusts and powers of attorney

Additionally, you may want to consider permanently keeping:

• Cancelled checks for major home improvements and maintenance (for the length of home ownership)
• Medical records
• Photos or video tapes of valuables
• Tax return copies and worksheets
• Income tax payment checks
• Annual IRA or other investment contribution statements

Storing Your Financial Documents

1. Safe-Deposit Box
Use a safe deposit box for financial documents that are not easily replaced. These include lifetime documents such as birth & death certificates, passports, social security cards, vehicle titles, marriage license and divorces decrees.

Additionally, keep military discharge information, life-insurance documents, loan documents and, in case you need to make an insurance claim, an inventory or your home’s contents.

2. Fireproof Safe Or Password Protected Electronic File
Use a safe or electronic files for other financial documents such as bank and investment statements, pay stubs, tax documents, pay stubs, insurance policies, etc.

To keep electronic documents safe, be sure to use complex passwords – according to Lifehacker getting your computer to make and remember your passwords for you may be the best choice.

Properly Dispose Of Unneeded Documents

When it’s time to discard your receipts, credit card statements or other financial documents containing your personal information, be sure use a shredder. Cross-cut and confetti-cut shredders offer better security than a strip-cut shredder because they can tear your paper into countless pieces.

^{*Disclaimer: Citywide Home Loans does not provide financial planning services or any other service apart from lending. You should always consult with your legal, tax and financial advisors to determine which strategy is the most suitable for your specific circumstances.}

Did you know about one third of us hire a tax accountant or other tax professional to file our tax returns? And yet, it turns out most of us don’t know much about what we should be looking for when we hire them.

80% of people who use a tax accountant or other tax pro never ask them about their credentials at all! That’s pretty surprising, especially since you’ll be sharing everything with them from your income to your bank accounts, to your Social Security number and more.

Do You Need An Accountant At All?

When you’re thinking through the process of finding the right tax accountant for you, it helps to consider what you’ll need the accountant to do for you.

To get you started, here are some common reasons you might need an accountant:

• To ensure the accuracy of your tax returns.
• To save time (not to mention stress).
• You’ve got a complex tax situation on your hands and you need specialized advice – for this year and for the future, too. Maybe you’ve started a business, invested in the stock market, purchased rental property, moved outside the U.S, or had something else come up that’s making tax time a bit more complicated.
• You know you need to file back taxes, pay off a tax debt, or maybe you’re being audited.

Which Type Of Tax Pro Should You Hire?

Certified public accountants (CPAs) have passed the CPA exam, are licensed by the state, and often specialize in one area of accounting. A CPA can represent you before the IRS in the event of audit or collections. Keep in mind not all CPAs handle tax issues.

Enrolled agents (EAs) have also passed thorough testing and IRS background checks. EAs can be ideal for complex tax situations since they often specialize their practices. They can also serve as your representative before the IRS for an audit or collections issues.

Tax attorneys are lawyers specializing in tax law usually with a master of laws degree in taxation (an LL.M.) in addition to a juris doctor (J.D.) degree. Attorneys are great for complex legal matters like preparing estate tax returns or an appearance before the U.S. Tax Court, for example.

How To Find An Accountant

Regardless of who you decide to hire, you’ll want an accountant who has handled tax situations similar to your own.

Referrals are your best bet, and it’s especially helpful to ask someone who has a tax situation that’s similar to your own. Other great sources of referrals include family, friends, business owners, financial advisors and attorneys.

Watch out for any accountants who guarantee large refunds or make other promises that quite don’t add up.

Do you have a straightforward tax return? Retail tax franchises like H&R Block, Jackson Hewitt and Liberty Tax Service might be a great fit. Ask if you can meet with a CPA, an EA, or other senior tax preparer. You’ll usually pay the same price, but you’ll work with a more seasoned tax pro.

Interviewing Your Accountant: A Checklist

Accountants and other tax professionals are required to follow federal and state regulations. But there are still several questions you can ask to help you you find someone who is both experienced and reliable.

Be sure to ask your prospective tax accountant:

• How long have you been in the tax preparation business?
• What licenses or other designations do you have?
• Do you specialize in any particular tax issues?
• What are your fees?
• How long will it take you to finish my taxes?
• Do you outsource any work or take care of it all yourself?
• Do you have a privacy policy? Will you be sharing my tax information with anyone else?

If all goes well during the interview, you’ll want to contact your state’s board of accountancy to check the status of the tax professional’s license and find out if there are any disciplinary issues. You can also ask the IRS Office of Professional Responsibility if an EA has been subject to disciplinary action.

Feel Confident About Your Decision

Remember that when it comes to choosing your accountant or other tax professional, never settle for someone who doesn’t make you feel completely comfortable. Keep searching if you need to! Tax season can feel stressful, but having the the right accountant in your corner can help you feel much more relaxed.

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4 Tax Laws You Should Know

^{*Disclaimer: Citywide Home Loans does not accounting services or any other service apart from lending. You should always consult with your legal, tax and financial advisors to determine which strategy is the most suitable for your specific circumstances.}

At the end of 2017, The Tax Cut and Jobs Act was passed by Congress and signed by President Trump. It’s full of compromises and tax law changes – ending up substantially different from the earlier House and Senate bills you may have heard about along the way.

Experts saw many of these tax law changes coming, while others were curveballs. Today, we’re breaking down four of the major tax law changes and reminding you of a few key elements that are staying the same.

Tax Law Changes for 2018

1. Changes To Your Tax Brackets

From 2018 through 2025, the tax law changes will keep seven tax brackets in place, but six are at lower rates. Keep in mind that most of the changes to individual taxes made by the bill are temporary — they’re set to expire after the 2025 tax year.

During this time, you might benefit from these new rates – unless you’re currently in the 33% marginal tax bracket. In that case, you’ll get bumped into the 35% marginal bracket in 2018. (This shift mostly affects singles and heads of households with taxable income between $200,000 and $400,000.)

The temporary rate brackets that come with the 2018 tax law changes are:

2. Itemized Deductions

The previous tax bill let you itemize deductions to the extent that they exceeded 2% of your adjusted gross income, including tax preparation fees, investment management and consulting fees, employee expenses that weren’t reimbursed, some kinds of hobby expenses, and more.

Now with the 2018 tax law changes, all of those itemized deductions that were subject to the 2% floor are eliminated until at least 2025.

Keep in mind that contributions you make to charities are still allowed as an itemized deduction, but the tax law changes increased the limit on cash contributions to public charities from 50% to 60% of AGI after Dec. 31, 2017 and before Jan. 1, 2026. If you normally plan on getting a deduction for your charitable gifts, it’s now more difficult to hit the itemized deduction threshold and receive the tax benefit.

The widely-used medical expense deduction is still around even with the tax law changes, to the extent the expenses exceed 7.5% of your AGI for years 2017 and 2018. Beginning in 2019 and continuing through 2025, the AGI limitation increases to 10%.

If you itemized in the past, you might be better off with the increased standard deduction now. This makes tax filing a little simpler, but it can also affect financial decisions regarding where you live, timing of charitable gifts, how expensive a home to buy, and whether to pay down your mortgage.

(Always consult with your accountant to figure out what’s best for your situation.)

3. Higher Standard Deductions

Starting in 2018, the tax law changes almost double the standard deduction amounts. Although personal and dependent exemption deductions, which would have been $4,150 each for 2018, have been eliminated.

These tax law changes will be great news for some taxpayers and a setback for others, especially those with dependents.

The 2018 standard deduction amounts are as follows:

• $12,000 for singles (up from $6,350 for 2017)
• $24,000 for joint-filing married couples (up from $12,700)
• $18,000 for heads of households (up from $9,350)

4. Mortgage Interest Deductions

The tax law changes still include the mortgage interest deduction – with a few small changes.

The tax bill restricts the mortgage interest deduction to interest on the first $750,000 of home-acquisition debt incurred after December 15, 2017. This is a decrease from the previous $1 million limit.

For debt you’ve taken on before December 15, 2017, the $1 million limit stays in place. You’re also no longer able to deduct new or existing interest on home equity lines of credit.

Provisions That Will Remain The Same:

1. The capital gain exclusion from the sale of your primary residence is staying intact. You’re still eligible to take the $250,000 capital gains exclusion from the sale of your home as a single taxpayer, and $500,000 as a married taxpayer filing jointly. For this to apply to you, you’ll need to occupy your home as your principal residence for two out of the past five years.

2. The widely-used student loan interest deduction is still allowed in 2018. You’ll be able to deduct up to $2,500 per year.

3. Tax rates on long-term capital gains and qualified dividends will stay the same. This means there’s a maximum rate of 15% for single taxpayers with taxable income over $425,800 and married taxpayers filing jointly with income over $479,000.

4. Investors will still be able to choose the most appropriate tax lot to use for investment sales’ cost basis.

When it comes how the 2018 tax law changes affect you and your family, you’ll likely find there is good news mixed in with some not-so-good news. Be sure to always consult with a knowledgeable tax professional about the best course of action for you throughout the rest of the year and beyond!

^{*Disclaimer: Citywide Home Loans does not provide tax services, financial planning services or any other service apart from lending. You should always consult with your legal, tax and financial advisors to determine which strategy is the most suitable for your specific circumstances.}