Top Tax Tips
Posted on Monday, April 6th, 2009 and is filed under Lifestyle. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
Tax season is here, so certified public accountant and professor at St. Joseph University Dennis Raible, has five top tax tips to help last-minute filers get their paperwork in:
1.Take advantage of free e-filing through the IRS. Eligible taxpayers can take advantage of an online program where taxes can be filed at no cost. For information on e-filing and eligibility, visit: www.irs.gov/efile
2. File an extension if you can’t get the necessary paperwork in by April 15; Raible’s advice is to “make certain that an extension of time to file is completed by that date.” Otherwise, taxpayers could face penalties. “By filing an extension, you’re extending your time to file your return, not pay your tax,” Raible explains. “An estimate of your final tax liability should be paid by April 15, however, an extension grants you until October 15 to get all of the paperwork together.”
3. If needed, arrange for a payment plan. Taxpayers who owe money to the IRS and cannot afford to make a lump sum payment have the option of arranging for monthly installments. However, Raible advises people to use the payment plan as a last resort, since the agreement could carry interest and penalties.
4. Deduct $500 for real estate taxes. Taxpayers, who claim the standard deduction, rather than itemizing, have a new real estate provision this year. A single person paying state and local real estate taxes is eligible to increase his/her standard deduction up to $500. For married couples, up to $1,000 could be added to his/her standard deduction.
5. Claim that tuition. The cost of qualified tuition can be claimed up to $4,000. Additionally, interest from student loans can be claimed up to $2,500. Both tax provisions have income thresholds.
