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UAFS Professors Offer Tax Day Tips
Written By: Ian Silvester
Today is Tax day, and we’ve asked Dr. Randall Stone and Dr. Diana Sims, educators and long-time tax professionals at UAFS what we need to know when filing this year.
What changes to Arkansas Tax Code should River Valley Residents be aware of this year?
The Tax Competitiveness and Relief (Act 1 of Third Extraordinary Session of 2022) means that marginal income tax rates for 2022 have been amended and the top rate will be reduced to 4.9%.
Inflationary Relief Income - Tax Credit (Also in Act 1 of the Third Extraordinary Session of 2022) allows for a full-year Arkansas resident having a net income up to $101,000 an additional tax credit.
Additional Tax Credit for Qualified Individuals (Act 1 of Second Extraordinary session of 2021)
Allows for an individual taxpayer having a net income up to $24,700 who timely files a tax return an additional tax credit.
Retired Law Enforcement Cold Case Credit, which creates a tax credit for retired law enforcement who work cold cases
What do taxpayers need to know, whether filing themselves or seeking help?
Taxpayers should make certain they have all the tax documents (W-2's and 1099's) they received in the mail. They also need to look on financial websites where they have an online account, including brokerage firms, cryptocurrency and online stock trading sites, and digital wallet sites like eBay, PayPal, and Venmo, for any 1099 forms. They should also be certain all K-1s from outside entities in which taxpayer owns an interest have been received, as some entities have filed an extension until September 15 and this will need to be noted.
It’s also important to remember that Taxpayers are responsible for the information submitted on their tax return, even if someone else prepares it, so if they should only use a reputable tax return preparer and review the information on their return.
What are some typical challenges I face when filing my taxes?
If a tax return includes more items than a W2 and interest income, it can be challenging to know where to enter the data. Another challenge is proper categorization of expenses for the self-employed and landlords. Different results can occur depending upon which form an expense is legally placed, so understanding placement is very important.
What if someone is not ready to file their taxes today?
An extension can be requested by using Form 4868 and must be postmarked or e-filed by April 18, 2023. This does not extend the time to pay, only the time to file. If you anticipate you will owe money with your return, you should estimate the amount owed and include it with the extension request. A Federal extension automatically extends Arkansas and Oklahoma returns with no need to file a state extension.
What should students remember when they file?
Students should remember to claim all the refundable credits available to qualifying taxpayers, including, but not limited to the Earned Income Tax Credit, the Child Tax Credit, the American Opportunity Tax Credit (AOTC,) and the Premium Tax Credit.
Students should also remember to have their 1098-T form ready, as they may qualify an education credit. Further, that credit is not always based simply on the amount shown as tuition paid on the form 1098-T, and there may be items that can be added including activity fees, books, equipment, etc., depending on their credit.
Students should also remember the truly free services offered in partnership with the Internal Revenue Service – such as the Volunteer Income Tax Assistance (VITA) program, which serves individuals whose income is below $60,000 annually, and the Fort Smith agency, WestArk RSVP at 401 North 13th Street in Fort Smith that can provide free tax assistance as well.
Dr. Randall Stone is a Certified Public Accountant, Personal Financial Specialist (PFS), Certified Treasury Professional (CTP), Chartered Life Underwriter (CLU), and Chartered Financial Consultant (ChFC) who teaches in the UAFS College of Business. He holds an undergraduate degree from UAFS, graduate degrees in both Accountancy (MAcc) and Taxation (MS Tax) as well as a PhD in Business Administration with a concentration in Advanced Accounting.
Diana Sims is a Certified Public Accountant, Certified Fraud Examiner (CFE) with over 47 years of experience in public accounting, and an Assistant Professor at the University of Arkansas of Fort Smith where she has taught business and accounting classes for 41 years. A single mother of two and a self-made entrepreneur, Diana owns several small businesses and holds two copyrights with the US Copyright office for CPA greeting cards she designed.
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