The time after graduation can be a tough one, financially. Starting out on your own, searching for a job, trying to pay back money you may have borrowed for school can all be quite stressful when it comes to managing a budget. Thankfully, there are a few tax breaks that recent college graduates can claim in order to save. (more…)

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Figuring out the Five Statuses

February 18, 2015

When the time comes to file your taxes, you’ll need to know which filing status you should use. There are differences between the five different options, and you’ll want to choose the one that gives you the greatest benefit. Make tax time easier and quicker by filing with the right status.

The Big Five

The five different statuses are: single, married filing jointly, married filing separately, head of household, or qualifying widow(er). If there is more than one status in which you meet the required criteria, you should file using the one that gives you the highest tax benefit. (more…)

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The Earned Income Tax Credit is one way that low and moderate income families can save some money at tax time. The EITC is refundable, and can reduce the taxes working families owe to zero in certain circumstances. If your income comes primarily from working, and not investing, you may qualify.

The income levels change every year, but an expansion has been granted until 2017 that extends the credit to working families with three or more dependents. The IRS has set guidelines that can help you figure out if you qualify for the credit, and if so, how much you will get. (more…)

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Working families know how expensive it can be to raise children. At tax time, the government offers some help for these families through the Child Tax Credit, which was enacted in 1997. This credit allows eligible families to receive up to $1,000 per child under the age of 17.

Both Democrats and Republicans have shown continued support for the tax credit, leading to an expansion in 2001. Now, qualifying families are eligible to subtract the credit right form the amount of taxes they owed for the year. For example, a couple with 3 children are able to deduct $3,000 ($1,000 per child) from the taxes they owe for the year. (more…)

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Common Business Deductions

February 15, 2015

As a business professional, you’re likely aware of the many deductions that you may be entitled to when filing your tax return. Almost anything you buy for the business can be deducted, as long as it is necessary to the business. Also, the cost has to be sensible. For small businesses, the deductions can really add up and help save some on your bottom line. Think of it this way: Your business falls in the 30% bracket and you buy a $1,000 computer. You can save $300 in a tax deduction as long as the computer is used for business purposes. You aren’t eligible to claim a deduction on a personal expense. (more…)

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Appropriate Record Retention

February 14, 2015

Your taxes are filed. Your refund’s been deposited. You’re gearing up for another year of deductions and expenses. So what should you do with this year’s tax documents? You may need to use your previous year’s tax documents for reference, or as proof if you get audited. It’s a no brainer that you should save your documents, but many taxpayers wonder exactly what the timeframe for retention is.

The IRS says it depends on the document, meaning what the expense is and what the document serves to prove. You should also keep copies of tax returns that you have previously filed, as they may aid you in the future. (more…)

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The Filing Five

February 13, 2015

The status you use when filing your taxes is one of the most important decisions you will make at tax time. Your filing status determines what benefits you are eligible for, in addition to tax rates and the different amounts you can deduct. Your filing status is determined by your marital status as of December 31st of the tax year, as well as whether or not you have dependents to claim. (more…)

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Getting an education isn’t cheap, and far too many people have a hard time paying for their education. Thankfully, the federal government has developed two different tax credits that can help decrease the amount owed at tax time. These credits, The American Opportunity Credit and the Lifetime Learning Credit help taxpayers who incurred education related expenses, such as tuition, fees, supplies, books, and other necessary equipment. Any personal expenses, like fees, transportation costs, and insurance do not qualify as an eligible expense for the purpose of either tax credit. (more…)

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Donating for Dollars

February 11, 2015

When you donate to a recognized charity, many times your donations are tax deductible. This affords you the opportunity to get a little extra back for items you aren’t going to use anyway. You need to make sure you keep an accurate list of all the items you donate, because you’ll have to report your donation to the IRS.

Currently, all items donated to charity must be in good condition or better. Under the old tax laws, you could receive a tax benefit for items donated in fair condition, simply because they had some sort of value. However, today the standard is set that all items are in decent condition and able to be reused. (more…)

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Dependent Benefits

February 10, 2015

One of the easiest way to increase your tax benefits at tax time is to claim a child or eligible adult relative as a dependent. You are entitled to a personal exemption for each qualifying dependent that you claim, which helps put a little extra cash back in your pocket. You may even be able to save some on the amount of tax you owe, as some dependents or a certain age and relationship can reduce your tax liability. By claiming dependents, you may be able to claim the Child Tax Credit, Earned Income Credit, and the Child and Dependent Care Credit. If you are unmarried, but can claim a child as a dependent, you may be eligible to file your return using the Head of Household status, which can be beneficial in many ways. (more…)

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