Tax day has been moved to April 18 this year, giving taxpayers a few extra days to work on their returns in hopes that they can reduce their tax burden. Though the “tax man” has been delayed, he’ll be extracting hundreds of billions of dollars from Americans this year, forcing some people to scramble to find the funds to make their payments.
April 18 is tax day for 2011.
Rushing through your return can increase the chances you’ll make some significant mistakes, perhaps overlooking important deductions and tax credits as you complete your return. Mark Steber, chief tax officer for the Jackson Hewitt tax preparing company notes that there are several new deductions available this year, some of which may reduce your tax liability significantly.
Let’s take a look at some tax tips & strategies from Steber:
Alternative Motor Vehicle Credit: This is a series of nonrefundable credits for certain qualified new vehicles purchased. The vehicle must be made by a manufacturer (not an individual) and must use certain types of alternative fuel;
The Child Tax Credit: Taxpayers can claim up to $1,000 for each qualifying dependent child who was under age 17 at the end of 2010;
The Additional Child Tax Credit: Taxpayers who earned $3,000 or more and did not use all of their Child Tax Credit may qualify for a refundable credit up to $1,000 per child;
Earned Income Tax Credit: This credit, often called the “EITC,” is a refundable credit for low-income workers (with or without children) who have earned income. Depending on income thresholds, taxpayers could be entitled to a refundable credit of up to $3,050 (with one qualifying child), $5,036 (with two qualifying children), or $5,666 (with three or more qualifying children). If taxpayers have no children, they may even qualify for a credit of up to $457; and,
The American Opportunity Tax Credit: The American Opportunity Tax Credit is a credit of up to $2,500 based on qualified tuition, fees and related higher education expenses such as books and software. This credit is unique because 40 percent of the credit, up to $1,000, is refundable and the balance is nonrefundable.
Overlooked deductions include some that are common to most taxpayers and should be reviewed before sending off your return:
Medical-related: Expenses for travel to health facilities and doctor’s offices, nursing home and services, medical aids and equipment, and hospital fees;
Job-related: Education expenses to improve job skills; professional journals, magazines and newspapers; union dues; mobile phone charges required for business; and self-employment tax and insurance premiums; and,
Property-related: Moving expenses; personal property taxes on cars, boats, etc. and casualty and theft losses.
If you’re unable to get your taxes done on time, you can file an extension which gives you until October 15 to complete your taxes. However, if you owe the IRS money, then you’ll have to estimate your payment and send your check in before the tax deadline.
Source: Jackson Hewitt Company
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