Maximizing Your Taxes

With your economic stimulus check long gone, and tax season approaching, you are probably in need of some helpful hints to get the most out of your tax returns this year. First, if you’re stumped on a particular issue or need help filing, we’ll cover some free services that may be available to you. Second, we’ll list some of the most commonly forgotten tax deductions – if you qualify for them, they’ll help you reduce the amount you owe to Uncle Sam.

Free Tax Services

Tax Counseling
The IRS runs a Volunteer Income Tax Assistance (VITA) program, which brings volunteers trained in tax law to community and neighborhood centers so that low to moderate income families can take advantage of the service. Call the IRS to find the VITA site in your area.

Tax Information
If you have specific questions but don’t want to pay for an expert opinion, try the IRS Telefax Recorded Information line. It’s free of charge and has recorded information answering all forms of tax questions.

IRS Free File
If your adjusted gross income was $56,000 or less in 2008 you are eligible to file your claim for free, and a list of participating vendors is available on the IRS website. Remember that your federal return is free, but most of these sites will charge you to e-file a state return.

Commonly Forgotten Tax Deductions

State Sales Tax
You can choose to deduct state and local income taxes or state and local sales taxes from your federal tax return. You should compare which of the two is the most beneficial for you, and if it makes sense you should itemize and file with these figures in mind. The IRS has a calculator tool on their site to help you determine the amount of your deduction available here.

Charitable Contributions
Keep track of all the donations you make throughout the year – did you help fun a friend who ran in a marathon for an NGO? It’s a valid deduction. Keep track of any mileage you may have accrued for charity purposes, as that can be added to the total to help increase your refund.

Moving Expenses
If you’ve relocated more than 50 miles for a job, all of those moving expenses are deductible, including mileage and supplies.

State tax paid in 2008
Did you owe when you filed your 2007 state taxes? If so, include that amount in your 2008 return, along with state taxes withheld from your paychecks.

Student Loans
The amount of money you paid towards your student loan applied to interest only is also deductible. If you are a student and are filing separately from your parents, any payments your parents made towards those loans is considered a valid deduction for you as well.

With these tips, you should see a larger refund or smaller bill from the IRS this year. Just remember, the earlier you file, the sooner that check comes!