Five Tips to Help you Save This Tax Season
Every year, countless Americans from all walks of life miss out on important, cost-saving opportunities, as they navigate the federal tax code and file their annual tax returns. As the April 15th filing deadline approaches, here are five tips from the IRS to help you save more this spring.
1. Itemizing vs. Standard Deduction: When filing your tax return, you usually have a choice between whether to itemize or take the standard deduction. Before choosing, it's a good idea to figure out your deductions using both methods. Then, choose the one that allows you to pay the lowest amount. The one that results in the higher deduction amount often gives you the most benefit. For more tips on how to choose, click here.
2. Special Exclusion for Cancelled Home Mortgage Debt: If a lender cancels or forgives money you owe, you usually have to pay tax on that amount. But when it comes to your home, an important exemption to this rule may apply in 2013. Click here to learn about those exemptions.
3. Free Tax Help for Military Families: The IRS provides free tax help to military members and their families through its Volunteer Income Tax Assistance program. VITA offers free tax preparation and e-filing at sites both on and off base. It also has sites to help our military overseas. Click here to learn more about free tax assistance for the military.
4. Five Credits That Can Reduce Your Taxes: Tax credits help reduce the taxes you owe. Some credits are also refundable. That means that even if you owe no tax, you may still get a refund. Five credits you shouldn't overlook when filing your tax return include:
1. The Earned Income Tax Credit
2. The Child and Dependent Care Credit
3. The Child Tax Credit
4. The Saver's Credit
5. The American Opportunity Tax Credit.
To learn more about the potential savings from each of these tax credits click here.
5. Additional Resources: Lastly, be sure to visit IRS.gov to access more tips and tools that will help you save money this tax season.
Please visit http://www.king.senate.gov for more information and let us hear from you. Our toll free number in Maine is 1-800-432-1599.
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