April is right around the corner, and if you're like our family- we DREAD tax season. I mostly dread it because of all the paperwork that is needed for our company to file taxes. I feel like the paper pile higher and higher every year. But, I'll do whatever it takes to avoid an audit- which means, filing 100% truth and nothing but the truth. Even if you have to pay, it's better than going through an audit and potentially facing jail time, right?!?!?
This year is the first year that I have ventured out to file our personal taxes myself. I am using the AWESOME tool- TurboTax. For anyone who doesn't have a masters in accounting, I would highly recommend this tool. It's super easy to navigate and a ton cheaper than hiring a professional CPA to do your tax filing. And, it promises to automatically tag anything that is questionable (i.e. anything that the IRS would pinpoint as "sneaky")....haven't had that pop up! Thank goodness! The user can also tag items to come back to- which I use often as I'm waiting to put in additional stock information from my husband's family stock.
So, if you want to go out on a limb, try TurboTax. If you still don't have enough confidence in yourself, a CPA is worth the money!
Whichever you choose, think about these things:
1) If you bought a home in 2008 and took the new home buyer credit, that has to be repaid...it's automatically taken out of your refund or added to the amount to pay. If you bought a home in 2008-2010 and took the credit but have since sold your house, the credit has to be repaid.
2) Student loans. Even if your parents are generous enough to be paying your student loan, the student is actually the one that gets to claim the loan interest and payments on their taxes. It's considered a "gift" from the parents that belongs to the student. Interesting, huh?
3) Remember ALL of your deductions. Churches, school fundraisers, Goodwill- all deductible. For Goodwill donations, you need that little piece of paper that they give you after you've dropped off goods. It has to have a 2011 date on it. And- you're only allowed to claim up to $500 per receipt unless you want to delve into itemizing your items donated with proof (i.e. pictures)- but who takes pictures of their stuff before donating?!?? Not me!
4) Remember ALL medical expenses- insurance, medicine, doctors visits, etc. These GREATLY add up in our family with a child and an adult with Type 1 Diabetes. Take the deduction!
Visit the IRS website (IRS.gov)- it's really helpful!
Happy tax season (in a sarcastic tone),
Erica
2 comments:
The FTHB credit taken in the maximum amount of $7500 or less has a minimum repayment of $500 every year until its repaid or the house is sold. If you took the credit in the maximum amount of $8000 the credit doesn't have to be repaid unless you sold your home or it is not your primary residence any longer. If you turn your home into an investment property the whole credit has to be repaid at the time you file your taxes.
Also you may want to add to your blog that SECU prepares taxes for free up to a household AGI of $50,000 for members or non members and a paid service ($75.00) for members who make more than $50,000 no matter how you file.
Thanks for your input! As far as the Homebuyer credit, all credits taken on homes bought in 2008 were for $7500/less. Thus, the credit must be repaid over 15 years ($500/year). If the home was bought in 09-10...the credit was for 8k, and is a "gift" from the "generous" government. All credits have to be repaid in full if the home has since been sold.
I didn't know about SECU- good to know. But, still, TurboTax is cheaper and is a breeze to use!
Happy taxes!
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