BURLINGTON, Vt. (WCAX) – Tax season is here, and there are a few changes to keep in mind – including pandemic-era credits that have ended and new credits you could claim.
The Department of Taxes says Vermont has over 90% of people filing electronically, who on average end up getting their refund an entire month faster. When you sit down to do your taxes, Vermont’s Tax Commissioner Craig Bolio says to submit all the necessary documents to ensure your refund isn’t held up.
“The other issue that we run into more frequently than you would imagine is that people’s social security numbers are incorrect with their employer,” said Bolio.
Despite backlogs from the IRS in recent years, Bolio says last year the state issued 95% of refunds requested by June 1. He says Vermont isn’t seeing too many substantial tax changes this year, but there is one aspect some Vermonters should be aware of.
“The legislature last year actually expanded both the Vermont earned income tax credit as well as the Vermont version of the child tax credit. So both of those can be claimed now, even if the file or the dependents do not have a social security number,” Bolio said.
Along with new credits, investment bankers at Raymond James say there are ways to maximize your money, like contributing to a health savings account or a retirement fund.
Richard Kowalski of Raymond James said, “Whether it’s an IRA, a 401(k), 403, B-457 – whatever plan you can participate in, any money that you put into the plan, you reduce your taxable income.”
“If you’re adding money to your 401k now, you’re gonna pay less in taxes, so might cost you less than you think, to put away money today,” said George Ewins of Raymond James.
Kowalski and Ewins say this is noteworthy for those who work for themselves through services like Uber and Airbnb.
“You have to kind of collect all that and report it or you could be penalized in the future,” said Ewins. “And additionally, there’s a great opportunity to do what’s called a solo 401k Perfect for gig economy records. And you can put more than twice as much as what you can put in a traditional 401 k.”
They say the bond market rates have also increased in recent years, meaning now’s a good time to buy.
Kowalski said, “It’s an opportunity for investors to buy treasury bonds, treasury bonds have an advantage in that you don’t pay state income taxes to the state of Vermont, it’s just federally taxable. And, you know, our state income tax rate I think is a three-quarter highest rate.”
There are also new options to file your taxes for free if you make under $79,000.
