No one wants to talk about their taxes on a beautiful summer day in the middle of August. But, believe it or not, there are some administrative things every taxpayer should be doing now and completing by the end of the year.
Spending some time now collecting documents, updating withholdings, and maximizing deductions can mean more money and fewer headaches later.
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Tracy Byrnes: Lisa Greene-Lewis, TurboTax expert and CPA, is with us right now. And look, the government offices have been taking a lot longer to get stuff done. So if you need to make changes, you sort of have to get on it, right? And the one thing is trying to get a Social Security number, especially if you have a newborn in the house.
Lisa Greene-Lewis: Yes, you definitely want to get on that because your baby is worth a lot of tax deductions and credits. But at tax time, you have to have their Social Security number in order to claim those credits and deductions.
Tracy Byrnes: And you actually make a great point and say same for a relative that you've been caring for. I didn't even think of that.
Lisa Greene-Lewis: Yes, same with the relative. If you provide over half their support, you're able to claim other dependent credit as well, even if you're paying their medical bills, you could possibly claim those deductions as well. But you also need their Social Security number
Tracy Byrnes: Right, so go dig that up. And finally, as far as Social Security numbers go, if you got married or getting married and I guess planning on changing your name, you've got to get on that.
Lisa Greene-Lewis: Yes, a lot of people don't realize that the IRS, matches information with the Social Security Administration. So when you get married, you need to change all of your information. You know, your last name with the Social Security Administration so that when you do your taxes and the IRS matches that information, you don't have any delays.
Tracy Byrnes: Even for opening joint accounts and things like that, it's important to get on that as quick as possible. And the other big thing that happened this year, was there was a lot of buying and selling of homes. So people really need to keep track of those records as well, right?
Lisa Greene-Lewis: Yes, I know this year people made some huge gains on the sale of their homes. So you want to dig up your receipts for any improvements you made to your home because you can lower how much taxes and the gain that you have to pay. So when you gather those expenses, you can add those expenses to the cost of your home and reduce the gain that you have to pay. And the IRS gives you up to $250,000 in exclusion for gain if you're single, and up to $500,000 if you're married, filing jointly.
Tracy Byrnes: Right, so if you put on a new roof or you resided your home, things like that, that all brings your cost basis up, thereby bringing your capital gain down. On the flip side, if you bought a home, you're saying save the original documents, origination fees, things like that. Those are all deductible eventually.
Lisa Greene-Lewis: Yes, you want to have your closing statements, so, you know, put those documents with the rest of your tax papers that you're gathering because sometimes closing statements, they might have loan origination fees or other fees that may be deductible, that may not show up on, for instance, the Form 1098 that shows your mortgage interest. So you want to definitely have that all together.
Tracy Byrnes: So start a shoebox, a file, scan it into something. Start keeping track of all this stuff. Lisa Greene-Lewis, thank you so much for giving us these great tips.
Lisa Greene-Lewis: Thank you for having me.
Editor's note: Video produced by TheStreet's Zach Faulds