by Denisse Dubrovsky
Tax season is here. Here are some tax time tips to maximize your refund and minimize your filing expenses.
1. Claim your tax credits
Make sure you claim all the tax credits you qualify for. One out of five taxpayers who are eligible for Earned Income Tax Credit fail to claim the credit, which can save you up to more than $5,000 in tax credit. Check out the IRS EITC Home Page to find out if you’re eligible. Besides EITC, there are also the American Opportunity Tax Credit for students, Child Tax Credit, and First Time Homebuyer Credit.
2. Itemize your expenses
If you are self-employed or a freelancer with an unsteady income, you may be able to deduct a portion of your job-related expenses such as job hunting, business car and telecommunication expenses and even medical and dental bills. It’s always a good habit to save your bills and receipts for the year for tax saving purposes.
3. File for free!
There’s no need to spend $200 or more to get your taxes prepared when you can file them yourself easily and quickly with online free tax filing service such as MyFreeTaxes.com. Provided as a service to low and middle income families by the Walmart Foundation, MyFreeTaxes.com walks you through filing your taxes step by step and helps you get the tax credits that you deserve, including EITC. You’ll also get your refund faster since you will be filing electronically. MyFreeTaxes also provides in-person tax help through their national Van Tour. To check if there’s a van coming to a city near you, visit the Van Tour page.
4. Use your refund to get paper savings bonds.
Did you know that paper savings bonds are now only available as a tax refund option? You can use all or part of your refund directly into the purchase of a Series I U.S. Savings Bond. Just fill out Form 8888 when you file your taxes and that’s it- you’ll receive your bond in the mail a few weeks later. Bonds can be purchased for as little as $50 or as much as $5,000, and the interest rate is competitive (currently 3.06%). Tax Time bonds require no bank account and can be gifted to loved ones directly from the tax form, all you need is a name. To learn more about Tax Time Bonds, visit www.bondsmakeiteasy.org or find the BondsMakeItEasy campaign on Facebook.
April 17, 2012 is the last day to file your taxes. The earlier you file, the sooner you’ll get your refund and receive those paper savings bonds in the mail.