Tackling the topic of taxes is a dreaded, but necessary, task as the annual filing deadline nears.
Abundant Life Worship Center’s family-focused tax seminar Jan. 6 aimed to help attendees prepare and maximize their money. The seminar is just one of many classes the center hosts as part of its “Skills for Life” ministry that is designed to educate military members, low-income families, new parents and at-risk youth.
“The Bible says that a lack of knowledge can destroy you,” Pastor Dedra Norwood said. “In other words, what you don’t know can hurt you — especially when it comes to taxes.”
The seminar, which lasted nearly two hours, was led by Abundant Life CFO Felicia Delacoudray, a payroll and tax specialist with FD Consulting and Accounting Services who has 16 years of experience.
She began by explaining that everyone needs to understand the basic tax forms most people fill out at their place of employment because the options selected on those forms will affect an employee’s final tax return.
Additionally, recent changes made by Congress will affect everyone in 2013. Delacoudray warned seminar attendees to keep an eye on their pay stubs as the Social Security tax will increase 2 percent, returning to its previous rate of 6.2 percent. Medicare also is expected to go up by as much as 2 percent.
Despite the increases, which Delacoudray noted will help future generations, Congress also passed several extensions to special tax deductions and tax credits, which taxpayers can use to their advantage to get the most of their returns. Since the IRS must update its systems to include all the new tax-law changes, Delacoudray said to expect delays in receiving returns.
She shared with the group several tips and best practices for tax season, and attendees asked questions throughout the evening.
A few of the tips include:
• Monitor medical expenses closely. All costs — including insurance premiums, copays, procedure costs, out-of-pocket prescription costs and medical miles — can be deducted.
• Maximize workplace retirement plans. Contributions come out of pre-tax earnings, which make tax liability less. It is wise to max out contributions, especially at a workplace that matches dollar-for-dollar.
• Find a tax professional. There are many free online tax-preparation applications and programs, but Delacoudray said that free tax-return preparation programs could end up costing users big-time. Often, these programs have users plug in numbers to calculate returns; however, if a user is not familiar with tax laws and what they’re entitled to claim, they could cost themselves a lot of money. Even worse, mistakes could garner penalties and interest for users.
• Be sure to claim unreimbursed employee expenses, which is anything that an employer requires an employee to have but does not reimburse for, such as a particular type of clothing or uniform, dry cleaning or supplies.
• Deductions to charitable organizations can be claimed for donations to official nonprofit entities. Retain proof of the transaction for records in the event of an audit.
• Taxpayers may be able to deduct some or all IRA contributions.
Norwood said she thought the seminar was informative and reminded those in attendance that it was part of the center’s “Skills for Life” classes, which are available when needed.
“We are here for you and here for the community,” Norwood said.
Registration for Abundant Life’s first-quarter “Skills for Life” classes is open through Jan. 21. To sign up or learn more, email email@example.com.