Don’t let procrastination be the reason you end up paying more in taxes this year. With this list of helpful tax tips from H&R Block, you will be on your way to saving money in all the right places.
Whether you are a first time parent or a parent again, take advantage of all your tax savings by claiming your child. If your child was born mid-year, or in December, you can claim your child’s dependency for the entire year.
Congratulations if you became a homeowner this past year! It’s an exciting time in life that comes with many tax tips. Although it does cost a lot to purchase a home, there are a few tax tips you can use that can save you money now that you are a homeowner. If you are a first time homeowner ask your accountant if you qualify for the $8,000 homebuyer’s tax credit. If yes, this will add up big on your returns.
Without a job
Did you know that you can claim job search expenses on your taxes? If you are unemployed and have been actively seeking employment, items such as car miles traveled for interviews, faxes and long distance calls, as well as printing charges for resumes, are all deductable. Discuss these tax tips with your account to see exactly what you can claim.
Back to school
When it comes to tax tips many people ignore their higher education fees. Talk to your accountant about claiming fees such as books and tuition. There are also numerous other deductions available depending on your educational institution and living situation. There is also an education credit worth up to $2,500 that you may be eligible to claim. To successfully claim all your deductions you will need to produce the proper paperwork, so it’s best to get started now.
Getting an extension
Although taxes are due by a specific date each year, it is possible to get an extension on your paperwork. This extension will not buy you time in making payments on any taxes you may owe, however, if you are waiting on paperwork to claim additional deductions you can ask for an extension. To ensure a successful extension without facing a penalty you will need to pay at least 90% of what you owed last year. By making these arrangements you can get a 6 month extension beginning in April. Failing to file and make any outstanding payments can see you being penalized by up to 4.5% for each month you are late.
Ensure you have a smooth tax year by keeping all your paperwork in a safe place. This should include all receipts, education documents, child care expenses, and any other deductions. When tax time rolls around again, you can then take your paperwork to your accountant and take full advantage of all their tax tips.