| In this world, nothing can be said to be certain, except death and taxes.
That was the famous quote from Ben Franklin. Indeed, it's a given that the government expects you to pay your taxes.
If you find tax season stressful, you are not alone. Many consider the top causes of stress to include lack of time, lack of money, health issues and being overburdened. Tax season stresses fall into literally each one of these categories.
Some help is on the way.
CNBC personal finance reporter Kate Dore spoke with some tax experts, and they offered some savvy ways for taxpayers to lower their tax bills — and possibly lower their stress levels, as well.
For example, if you're planning to donate money, it's good to know that certain charitable giving moves provide a bigger tax benefit. The Tax Cuts and Jobs Act of 2017 increased the standard deduction, making it harder to claim various charitable tax breaks. In a workaround, tax experts suggest it's worth looking into so-called donor advised funds and qualified charitable distributions.
To that point, given these deduction constraints, investors can maximize tax breaks by "bunching gifts," one expert said. The donor advised fund strategy concentrates charitable gifts in one year, as opposed to spreading them over several.
Also, once you're age 70½ or older, it's typically better to donate funds from pre-taxed IRAs, known as qualified charitable distribution.
Additionally, tax experts say that if you received a tax penalty notice from the IRS, it's possible to get the fees waived in certain situations by using a first-time penalty abatement.
Indeed, a taxpayer may qualify for relief from a penalty by administrative waiver if it's their first tax penalty or they meet other criteria allowed under tax law.
It's like a "get out of jail card," one expert told CNBC's Dore.
Three types of tax penalties may qualify for first-time abatement: failure to file, failure to pay and failure to deposit, according to the IRS. However, most taxpayers won't qualify if they didn't file a return. When you receive an IRS penalty notice, you can request a first-time abatement by following the letter's instructions.
By the way, if you are trying to figure out what the IRS tax filing deadline for the 2023 tax year is, here you go: April 15, 2024. So mark those calendars because missing the tax filing deadline without filing for an extension means the IRS can hit you with penalties and interest on taxes owed.
For more advice to help you make smart financial decisions, check out CNBC's Financial Advisor Hub and Personal Finance section. |
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