ROANOKE, Va. (WDBJ) - A common misconception about taxes is that filing an extension means you don’t have to pay any money until Oct. 15. However, that deadline only applies to the paperwork that’s due when you file your taxes.
Federal taxes were due April 15 even with an extension, but state taxes are due May 1.
“Give them something by May 1 and then we get the taxes done later.” David Kembel, of David Kembel Tax Services, said. “Hopefully you gave them too much. Look at it like a small, short-time loan to the government, and you’ll just get your money back plus interest down the road.”
Kembel said once you pay your state tax, you will get money back this fall. He explained that under the new Trump tax policy, the Virginia government will be collecting a lot of money in taxes this year.
“They figured out it’s a windfall for the state,” he said. “I don’t know how many of hundreds of millions of dollars of tax revenue they’re collecting, but a lot.”
That’s why taxpayers will be getting some money back this fall.
"They've decided to give $110 a piece. So everybody that files a tax return that pays Virginia taxes, as I understand it, will get $110 in October."
That's $110 for individuals and $220 for married couples.
Because of other changes, taxpayers will likely owe less or get money back from Virginia next year.
"What we've seen is almost 100% of the Virginia refunds are down," Kembel said. "And so now they're going to give some of that back, like a little rebate or something, this year. And then going forward they've changed the standard deduction so that we should have fewer Virginia taxes going forward."
And speaking of next year, Kembel said there are ways to prepare for next year's taxes now.
"For most folks, their refund was lower than they were expecting, so if you want to get those big refunds back, then go to that employer, fill out that W-4 and somewhere or another have them take more taxes out."
However, if you want more money in your paycheck, knowing what your deductions are ahead of time can help.
"If you've got a huge mortgage, if you give a lot to the church, if you have several kids and some of them are in college and some of them are in daycare, then you might tell your employers, 'hey, I don't need to take a lot out because I have all these deductions.'"
He said a lot of people file their taxes not knowing if they'll owe money or get money back. However, consulting with a professional accountant can spare you the surprise.
"All our clients know this, but we beg them to come in in the middle of the summer and let's talk," Kembel said. "Let's do some planning and some strategizing. Let's look at your check stub and see where you're heading."
Kembel said it’s important to know that there is no right or wrong way to fill out your W-4. It’s not better or worse to get a tax refund or get more money in your paycheck. You have to decide which option is best for you and your family about when you want your money.
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