3. Often Overlooked Deductions Can Yield Cash You Didn’t Know You Had
We all know that good feeling of putting on a coat we haven’t worn in a few months, putting our hand in the pocket and pulling out a dollar or two we’d forgotten about. You can get that same feeling by making sure that your tax preparer doesn’t overlook the most overlooked deductions in the categories of tuition, interest, child-care and military reservists expenses, to name a few.
An enrolled agent can show you the deductions you deserve to claim to cut your tax bill.
4. Your Home Shelters More Than Your Family
Mortgage interest deductibility is one of the incentives for home ownership. But did you know that your mortgage insurance premiums may be deductible, too? Your home equity loan interest may be deductible, as well.
Even more important to many who have had their mortgages foreclosed: There’s a new take on the taxable nature of mortgage forgiveness.
An enrolled agent can show you how your home may be your biggest tax shelter.
5. Looking For Your Check? First, You’ve Got To File.
The thinking behind the saying, “You can’t win if you’re not at the table,”might well apply to any refund program to the famous “stimulus checks” to the Earned Income credit. Even if you have no legal responsibility to file a tax return, you still must file in order to get your check. The IRS website, www.irs.gov www.irs.gov provides the information that you need, or you can contact an enrolled agent who will explain it all and walk you through it.
And beware of scam artists who tell you they can get you your check faster for a portion of the proceeds. They can’t. And it might just put your identity and bank account up for grabs.
6. Self-employed? Make sure you get all the deductions you’re entitled to.
If you’re self-employed, there are unique rules that guide your tax filing-as unique as the service you provide. Your home office and child care expenses, your retirement plan, even FICA taxes take on whole new meaning when you’re working for yourself. Should you defer income and accelerate expenses? Or maybe it’s the other way around. Your tax preparer should know, and an enrolled agent who specializes in preparing taxes for the self-employed will know for sure.
7. High-tech scams will separate you from your money
We’ve all heard the phrase about a sucker being born every minute. Now it seems that there’s a new scam born just as often. The latest involves someone pretending to be from the IRS asking for your Social Security Number and your bank account information so they “can deposit your refund or economic stimulus check directly.”The only direct deposit they will be making is into their own account-most likely from yours.
Remember: It’s rare for the IRS to make its initial contact with you by phone. Usually, the IRS will make initial contact by mail.
8. Make Sure You Get a Receipt, Whether You’re Filing Electronically or by Paper
You’ve worked hard to get your receipts in order so that you can make the most of your allowable deductions. Now get the most important receipt-for filing. Whether you file by mail or electronically, make sure you get a receipt. Sending your return via the U. S. Postal Service’s return receipt service adds only $2.15 to the cost of mailing. Be sure your computer-based tax program prints a receipt for filing.
Whether you prepare your own taxes or an enrolled agent prepares them for you, make sure to get that receipt.
9. Failure to File Red Flags You for Penalties
What’s worse than reaching April 15 with taxes owed and no way to pay? Not filing your taxes. Failing to file your return is a whole lot worse than failing to pay your balance due. Failure to file puts you at risk for penalties and interest. Instead, file your taxes and pay something. Then set up a payment plan with the IRS. An enrolled agent can guide you through the process.
10. It’s April 15, and You’ve Filed Your Taxes. You’re Almost Done.
What? There’s more? Absolutely. Now is the time to pitch out any records that you kept for 2007 that have no bearing on your taxes-the receipt from the drycleaner that was misfiled along with your parking and mileage records, the odd greeting card that made its way into the file for the donated car, the…you get the idea.
And while you’re at it, now is a good time to set up your files for next filing season while the categories that pertain to your unique tax situation are still fresh in your mind.