Here's some financial planning advice for Tax Day
Need more time to file your taxes? Thinking about selling your home to buy a new one? And will Trump's policies change what you owe?
Tax Day is lurking around the corner – it's Tuesday, April 18th, this year.
Take Two has some financial advice for you, though, because L.A. is an expensive place, right?
Financial planner Delia Fernandez offers her advice on how to make tax day less painful, what's she's watching for in Congress and her tips for downsizing homes in Los Angeles.
Want advice from Delia Fernandez? https://twitter.com/taketwo
Need more time to file your taxes?
Americans got four extra days this year since the 15th falls on a Saturday, but what if you want even more time?
"Uncle Sam will give you some time, but you have to let him know," says Fernandez.
Fill out form 4868, and you'll get an additional six months to submit your taxes.
"But here's the deal: if you don't fill out that form, there's a 5 percent penalty every month," she adds.
If you file for an extension but don't send in any money to cover the taxes that you probably owe, then there is another penalty of 1/2 of a percent each month.
For those who can't help but wait until the very last minute, extended hours are going to be available at the following USPS locations on Tuesday night:
- Los Angeles Processing & Distribution Center, 7001 S. Central Ave., with mail collection until midnight;
- Santa Ana Processing & Distribution Center, 3101 W. Sunflower Ave., with mail collection until midnight;
- Santa Clarita Processing & Distribution Center, 28201 Franklin Parkway, with mail collection until 9 p.m.
What's good advice for freelancers in Southern California?
"All of us who are self-employed need to be better organized," she says.
Uber and Lyft drivers need to track mileage, fuel costs, insurance and more as a business expense.
Actors and crew members in Hollywood may have to track write-offs like video costs and agent fees.
"You may want to check in with an accountant," she says, "who can help you understand which ones of those deductions are considered ordinary and acceptable."
If I'm downsizing my home, what's good for me when I sell and then buy in SoCal's hot housing market?
There's a big tax advantage if your old home was your primary residence in two of the last five years.
"You get to take $250,000 in gain from the sale of that house and you don't pay any taxes," says Fernandez. "It's the best deal that a lot of people don't know about!"
And if you own that home with a spouse, then you can take $500,000 in total from the sale tax-free.
Worried about a jump in property taxes when you move from your old home to a new one?
In California, when you turn 55 you can take your current property tax to your new home as long as it's of equal value or less.
"You can only do this once," says Fernandez, "and you have to buy the new one within two years."
If you are married and own the property together, then only one person in the relationship has to be 55.
What should people watch for when it comes to taxes changes coming from President Trump and Congress.
Just this week, President Trump said he wanted to go after health care plans and subsidies that pay the bills for low-income people.
The threat's aim was to bring Democrats to the table on health care reform.
"I have clients who are needing to retire or getting laid off in their 60s before Medicare comes through [at age 65]," says Fernandez.
If health care costs shoot up because of this political move, it could devastate their finances.
She also expects in any proposed tax package that people earning less than $50,000 will see a a jump in what they owe, while those earning more than $200,000 will get a cut.