Know your way around tax season
Welcome to tax season -- a time for W2s, 1090s, 1040Ezs and other forms that could double as robot names. As years go, 2009 was a turbulant one for many tax filiers. The good news is, there are some important changes to tax filing and new and extended credits that were created to help taxpayers impacted by the recession this year. Some of these tax tips and changes are listed below, even more can be found at United Way's Smart Choices Guide online. So good luck and happy filing. Let me know if you found the info below helpful or if you know of other tips to include.
Free Tax Filing: Last year, Massachusetts countless residents paid for tax preparer services, often at a minimum of $150. Many filers however may be eligible for free tax filing services. To determine your eligibility and find a free tax filing service near you, call 2-1-1, United Way's free helpline. If you earned less than $58,000 in 2009, you can also file online through the Boston Beehive.
Earned Income Tax Credit and Other Credits: Families who earned less than $48,000 in 2009 may be eligible to receive more than $5,000 of their earnings back through EITC, money that working families can use to pay off debt or save for the future. To learn more, click the above link. You may also be eligible for other credits if you:
- Pay for childcare for your child under 13 who lives with you
- Help pay for college for your child who is under 24 and a full-time student
- Are saving for retirement
- Are paying for your education
Tax Strategies for the Self-Employed: Small businesses have been hit hard by the recession. In the changing economy, many people are self-employed. Learn tips for getting the most out of your tax return including: Keeping a business mileage log, keeping business and personal expenses separate, and setting aside "estimated taxes". In addition, expanded and new credits for businesses include:
The American Recovery and Reinvestment Act has expanded many tax credits and created new ones. Expanded and new tax credits this year include:
- $8,000 potential credit for 1st time homebuyers
- Increase of EITC and Additional Child Tax Credit
- Expansion of the HOPE education credit
- Credit for new automobile purchase
Split your refund to pay off debt and build savings
Learn how to manage your tax refund to help you meet multiple goals. Talk with your bank or Credit Union about setting up no fee accounts for your top 3 money goals, for example: Checking account for bills and debt payments, Money market savings for emergencies, a "529" Education savings account for college. And bring those account numbers with you when you file your taxes.
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