The chief tax officer over at Jackson Hewitt Tax Service has generously provided Outlaw readers with these valuable last-minute tax filing tips:
DO Know About New Tax Rules and Changes: New and changed rules may put more money in your pocket. For example, if you adopted a child this year, you could add an additional $13,170 dollars to your refund. If you made an energy-efficient improvement, such as installing a central air conditioning unit in your home, you could add as much as $1,500 dollars to your tax refund. During the final weeks’ rush, don’t overlook tax rules that can make a positive difference to your bottom line.
DO File Electronically: IRS e-file is not only faster than mailing a return; it’s also more accurate and includes a confirmation of receipt. When you e-file and use direct deposit into a bank account, you can receive your refund in as little as 8 – 15 days. Jackson Hewitt provides free electronic filing with paid tax preparation.
DO Choose the Right Tax Preparer: With so many options available, picking the right tax preparer is critical. Look for someone with these qualifications: overall experience; up-to-date knowledge of the tax code; accuracy of filing using IRS e-file; an IRS-issued PTIN (Preparer Tax Identification Number); year-round availability; and a guarantee that he/she or the tax preparation company will stand behind the work done.
DON’T Overlook Important Tax Deductions: There are many tax deductions forgotten every year. Don’t leave money on the table – take all of the deductions for which you qualify. Here are some examples:
Medical: crutches, canes, orthopedic shoes, hearing aids, eye glasses, contact lenses; hospital fees for services such as nursing, physical therapy, lab tests, and x-rays
Real estate-related: the first $500 [$1,000 if married filing jointly] of real estate taxes paid can be added to your standard deduction or you can deduct all real estate taxes paid if itemizing deductions
Job-related: professional journals, magazines, and newspapers; required uniforms and work clothes not suitable for street wear; dues to professional organisations; and business expenses
Property-related: sales tax paid to buy a new vehicle; commission to brokers or agents for the sale of property or property management; moving expenses; and general casualty and theft losses
Self-employed health insurance: self-employed taxpayers can continue to deduct 100% of the cost of their health insurance directly on the Form 1040, and new for this year, they can also reduce their income subject to self-employment taxes by the same deduction amount
State and local sales tax deduction: taxpayers who live in states with little or no state income taxes can choose to deduct their state and local sales taxes paid for the year as part of their itemized deductions
DON’T Delay Any Longer: The tax deadline of April 18 will be here in a matter of weeks – why wait to file, especially if you may be eligible for a tax refund? Approximately 75 per cent of taxpayers receive an annual refund, according to the IRS.
DON’T Panic If You Cannot Pay: Requesting an extension to file a tax return does not give you an extension of time to pay. If you cannot pay the full amount of taxes you owe by the April 18 deadline, file your return and pay as much as possible to avoid a high assessment of penalties and interest. If you can’t find low-cost funding for your balance due, the IRS may be able to provide some relief, such as an instalment agreement, a short-term extension to pay, or an offer in compromise.
Compiled by Mark Steber, chief tax officer, Jackson Hewitt Tax Service Inc. Originally published on Credit Card Outlaw — be sure to check out our latest credit card deals and promotions. This article is not a substitute for careful tax planning, professional advice, and/or consultation with a tax professional. No warranties or guarantees provided.