MADISON (WKOW) — With Tax Day right around the corner, a local financial advisor stopped by WKOW to share some last-minute tax tips.
On Wednesday, Sarah McGinnis with Savant Capital Management, joined the Wake Up Wisconsin crew to talk tips and share some good ways to utilize your tax refund.
McGinnis says if you feel that you can’t get your taxed filed by April 15, then you can file an extension. She says this will give you until October 15 to file your taxes, but you need to notify the government of your intentions by this deadline. If not, you will start accruing late payment penalties if you owe money.
There a few new things to consider this year. McGinnis says the standard deduction has increased to $24,000 dollars for married couples, $12,000 dollars for singles, and $18,000 dollars for head of household. She says as, a result, many who itemized deductions in prior years will not itemize this year. Personal exemptions for dependents also have been eliminated, which means you don’t get a deduction for your children anymore, according to McGinnis. Instead, a higher tax credit is available for all children under the age of 17, a $2,000 dollars credit per child.
Another important tip from McGinnis, plan ahead for next year. She says gathering up all your documents and scurrying at the last-minute will likely cause you to miss some key areas that could have benefited you if you had given yourself more time. She also says to look into making last-minute IRA contributions.
In terms of smart ways to use your tax refund, McGinnis has these ideas:
- Pay down debt. Pay down high-interest debt, like credit cars with double-digit interest rates.
- Establish or build up your emergency fund.
- Put toward a college fund.
- Invest in your retirement. McGinnis says if you are under age 50, you can invest $5,500 in a Traditional or Roth IRA for 2018, but you only have until April 15 to make the deposit.
- Invest in your health. McGinnis says to invest some of that return into getting back in the gym and building a fitness plan.