As a kid, I loved the summer. No more long hours trapped inside a classroom learning about something I thought, usually correctly, I would never need.

I would play football or basketball outside with my friends. And, if we didn’t have a major vacation planned that year, it usually mean some kind of summer camp. It was the answer my parents had to the age old question: What do I do with my kids?

If you have kids, this might be something you’re struggling with. This is especially important if you are a parent that works or you are deciding whether to enter the job market in the summer. One way that you can improve your peace of mind — and possibly even save money — is by sending your child to a day camp.

Peace of Mind

Day camp can offer peace of mind to the parent who doesn’t know where to send the kids during the summer. Even if your child is old enough to be home alone, it’s still a huge leap of faith to let a teenager be “in charge” of his or her day.

A day camp can help with this. Day camps for younger children provide a safe place for them to interact with others, as well as possibly learn something. Educational day camps can help your child stay on top of academics during the summer so that he or she isn’t behind when the new school year starts.

For older children (teenagers) day camp provides another opportunity: A paying job. While there are day camps for teens, it’s more likely that your teenager would prefer to be a camp counselor. He or she can have something constructive to do during the day, and even earn a little money. Camp jobs are usually low pressure affairs that won’t stress out your kid. It will also teach them the value of hard work.

How Can Day Camp Save You Money?

While day camp does offer peace of mind, it is a little harder to find a day camp that can save you money. In some cases, there are day camps offered by community centers that are free or very low-cost. These programs can save you money over what you would spend on day care during the summer, but you may also be able to save on summer camp that is not as low cost.

If this applies to you, you may be able to save up to $2,100 on your taxes with the help of the Child and Dependent Care Tax Credit. It’s also possible, in some cases, to use the pre-tax dollars if your employer offers a flexible spending account (designated for dependent care) to pay for day camp when your child is under 13.

Finally, you may be able to use day camp to save money on college costs down the road. Some universities put on day camps that are technically college courses. Teens can take the classes at a discount and earn college credit that will help out later. Check out what types of concurrent enrollment options are available at the local university, as well as whether or not summer programs allow teens to earn college credit. It can save you money later when your child goes to college.

Carefully consider the pros and cons of day camp. You might be able to use day camp as a way to keep your child occupied this summer, and provide you with peace of mind — since you know where your child is. Additionally, with the right planning, you can even save a little money. In the end, child care is always expensive, it’s about providing the best experience at the lowest cost.

While headhunters will never charge you, there are other service providers that will. Sometimes you have to spend money on resume development and professional development in order to show that you are competitive and up to date in your field.

This time of year, it’s common to be looking for a summer job, whether it’s a part-time second job or a full-time job.

Are you looking for a summer job? If so, some of your expenses might be tax deductible, providing you a way to save money come tax time.  Our tips are framed as searching for a “summer job” but they apply to any job search in any season.

Who Qualifies for a Job Search Tax Deduction?

Here are some of the requirements you need to meet to take the job search tax deduction:

• You must be looking for a summer job in the same career field as your most recent job.
• There hasn’t been a “substantial” break between when you were last employed and when you started looking for a job in the same profession.
• You have enough tax deductions to itemize your deductions (TurboTax will figure this out for you).

What Summer Job Search Expenses Can Be Deducted?

As you look for your summer job, you might find that you are spending more money than you thought on your efforts. You can deduct the costs of printing out resumes, as well as the cost of having a professional help you develop your resume.

Career coaching and career seminars might also be eligible for a tax deduction. If you sign up for an employment agency and you are charged outplacement fees, you may also be able to deduct these costs as well.

You can deduct costs related to travel — as long as your travel is designed specifically to help you find a job in the same career field you already work in. So if your summer job search takes you across the country for interviews, you may be able to deduct your out of pocket travel costs directly related to your job search.

Lastly, you can deduct your job search expenses if your miscellaneous expenses exceed 2% of your adjusted gross income (Adjusted gross income is your gross income minus adjustments) when you itemize your deductions.

So if your AGI is $30,000, 2% of that is $600, so you would be able to claim your expenses over $600. If you had $1,000 in unreimbursed job search expenses, you may be able to claim $400 of those expenses.

What Summer Job Search Expenses You Can’t Deduct

If you’re searching for a job for the first time, you can’t deduct those expenses (you would not have a “similar career field” to be moving from, which is a requirement). If you are changing careers (say going from working retail at the mall to analyst at a financial services company), those job search expenses are not deductible.

If a prospective employer reimburses you for costs you incurred, you can’t deduct those expenses. For example, if a paid for your flight to attend an interview and the company reimbursed you, you would not be able to claim that expense.

As is the case with any deduction, make sure that you keep good records of all of your expenses. Save your receipts, and be sure to write down what you did, and how the expenditure contributed to your job hunt.

Looking for a job during the summer can start to get costly — especially if you are in a competitive field and you need to make use of career resources to gain an edge. Keep track of everything you spend.  TurboTax will do all the calculations and help you determine if you are eligible to deduct your summer job search expenses so you can save money on your taxes.

Since I was there only a few months, I never had grandiose projects or high stress moments. I had my share of retail jobs, where it was relatively easy work where I’d make new friends, and corporate internships, where I made a few friends but generally tried to figure out if that line of work was for me.

There were aspects about them both that I enjoyed but the one thing I didn’t do a good job with was saving my money. When you have few expenses, unlike years later, you want to take advantage and save for the future. Here are some tips for how to do that, even if I didn’t!

1.  Make it Automatic

Whether it’s the story about the Tortoise and the Hare or David Bach’s, Automatic Millionaire – the key to success is being slow and steady, and make it automatic. Have a portion of your summer job paycheck directed to a savings account. If you know you will need the money during the school year, have it put into a high-yield savings account.

If you won’t need the money soon, consider opening a tax-advantaged retirement account, such as a Roth IRA, or even a certificate of deposit. If you open a traditional IRA, you may receive a tax deduction. Open a Roth account, and your earnings are tax free (but you have to pay taxes now).

2.  Learn to Budget

Budgets are important and it’s best to learn how to budget when you don’t have a lot of income and won’t have a lot of expenses. You can go with budget software or do as I did, use Microsoft Excel. I categorized each of my expenses and compared it with my income.

The key to budgeting is making sure your expenses stay under your income. Some suggest “paying yourself first,” which means you set aside a certain percentage to savings as an expense. So if you make $500 a week, pay your first $50 to savings and treat your income as if it was only $450 a week.

Budgeting should liberate you to spend intelligently. If you pay yourself first and are saving that $50 each week, feel free to use the other $450 without feeling guilty because you’re already saving.

3.  Reduce Your Living Expenses

Do what you can to reduce your living expenses. If you are college student, moving back home with your parents might not be your first choice of living arrangements for the summer but it can save you a ton of money. You can probably live rent free, get free food, and have access to free laundry (though Mom might make you fold your own now).

If you can’t live with your parents for the summer, try to find inexpensive housing. Many college towns offer discounted summer rates, and you might be able to split your housing costs with a couple of roommates if you plan properly. Plus, it’s a lot more fun to live with roommates anyway.

4.  Be Tax Wise

Fill out your W-4 and get your employer to take money out of your paycheck for taxes. This is especially important if you know that you will have to pay taxes at the end of the year. Have money withheld from your paychecks so that you avoid having to try to come up with what you owe all at once.

If you end up not owing or not owing as much, you might get a big tax refund. This can come in handy later on during the school year. For those who have a hard time saving, this “forced savings” can be one way to make sure that you prepare at least a little bit for the future. (I don’t personally advocate forced savings but you know yourself best).

This means, too, that you don’t want to forget to file a tax return later. If you want your tax refund, you have to file a tax return. Most students, though, don’t make very much and have very simple tax returns, but you can still file for a tax refund if you had federal taxes taken out or if you qualify for a tax credit like the Earned Income Tax Credit.

Even if you make money as someone who is self-employed, make sure that you are aware of the tax implications. You need to report the income to the IRS at tax time, and if you make at least $400 in net income, you will need to pay self-employment tax. Set aside money each month for tax purposes so that you aren’t caught by surprise with what you owe for being self-employed later.

Taxes may seem tricky and scary but they aren’t when you use tax software. TurboTax will help you file your taxes and put more money in your pocket..

Fortunately, you’re not alone. This is a scenario that affects many people and the IRS understands that sometimes reality interferes with your ability to pay. There are options available to you if you are unable to pay and many are quite reasonable. We’ll go through some of the best options if you can’t pay.

Installment Agreement

The IRS offers installment plans that can help you break up what you owe into more manageable payments over time. You can apply online if owe less than $50,000 in combined taxes, penalties, and interest. You specify how much you can pay, how often you can make payments, and specify all that on an application. The IRS will now allow up to 6 years to pay your tax liability if you’re on an installment agreement.  There’s an application fee involved and the interest is manageable (especially since rates are low right now) but the IRS still has to approve your application. Not everyone is approved for this.

The whole process can be completed fairly quickly if you have your Caller ID number (from the top of your tax due notice), adjusted gross income, bank address, and employer address. You will have to pay the aforementioned loan fee, and pay interest, but it’s generally much less than what you would pay if you charged your tax bill to a credit card. Even if you end up with the highest fee schedule and interest, it’ll be much less than most credit card companies, so it’s a better choice than paying with plastic.

If you’re seriously considering this, the fees are $52 for a direct debit agreement ($105 for the standard agreement or payroll deduction). It can be reduced to $43 based on income, that’s the cheapest option. It’s worth noting that many states also have installment payment options that you can take advantage of. Check with your state comptroller’s office, or tax division, and you can find out more about your options.

Request “Additional Time To Pay”

In same cases, if you can describe your situation, and if you are able to pay within 60 to 120 days, you might be able to get a little more time to make your tax payment. Call 800.829.1040 to speak to someone about this option or apply through the Online Payment Agreement application. If you can pay your tax in full within a relatively short period of time, there is a chance that you can pay less in interest and penalties.

Do not confuse this option with an “extension,” which is simply a request for additional time to file your return. Those who request an extension still have to pay any tax liability on tax day, they don’t get additional time to pay their taxes.

Offer in Compromise

You can actually offer to settle your tax obligation with the IRS by paying a percentage of what you owe. If you are having trouble paying due to income or other problems, the IRS might accept an Offer in Compromise.  The IRS usually only accepts if the offer is reasonable – and if the likelihood of collecting the whole amount in a “reasonable” period of time is rather slim.

The IRS is more flexible than you might think, as long as you are willing to meet your obligation, and can show that you need the help. Contact the IRS to work out an arrangement that makes paying your taxes a little more manageable.

If you have questions, don’t forget TurboTax has CPAs, IRS enrolled agents, and tax attorneys available to answer your questions year round.

Did you receive a K-1 form? It’s not a common form for most taxpayers but questions about K-1s are some of the top questions we are seeing at this time in the season. This is a document that partnerships, LLCs, S-corps, estates, and trusts use to describe to owners/shareholders what income they are receiving from the entity.

Basically, it’s a schedule that allows you to see what income you received during the tax year and the Schedule K-1 is used for pass through entities.  Realize, too, that you might receive a K-1 form if you are invested in a fund or an Exchange Traded Fund that operates as a partnership. As a result, you’ll get a form that states your portion of the profit or loss associated with the partnership.

If you are a partner or shareholder in a pass through entity, you probably received a copy of the Schedule K-1, filled out to describe how income has been distributed to you. The information from the K-1 is then put on your personal tax return.

The entity issuing the K-1 forms files them with the IRS. The recipients use their copies to make sure that they are paying the appropriate taxes.

Will You Get a K-1?

If you own a business with someone else, such as a partnership, then that business will issue you a K-1 to report your share of the income, credits, and deductions. If you own a business by yourself, either incorporated or as a sole proprietorship, then your business won’t issue a K-1.

There are a few other cases where you will receive a K-1 and not realize you were to get one – the most common has to do with your investments. If you invested in a master limited partnership (MLP), then you will receive a K-1 because MLPs are set up as partnerships with shareholders being limited partners in the enterprise. If you invested in an Exchange Traded Fund, some of those ETFs will issue K-1s if they are organized in a way that requires it. These ETFs are often trading in commodities such as gold, silver, natural gas, or oil.

Parts of the Schedule K-1

There are three different sections of the Schedule K-1:

1. Issuing entity information: This section includes information about the entity issuing the K-1. It has the EIN, as well as the address and the IRS filing location of the entity. You can also find the publicly traded partnership status, if it applies.
2. Partner/shareholder information: This is the area where the individual partner/shareholder information appears. It includes the tax ID number (usually a Social Security number) as well as name and address.
3. Financial details: In this portion, the partner/shareholder can see information about his or her profits and losses related to the entities activities. So, if you have received a distribution from your LLC, or if you have income from a partnership or S-corp, this is where it will appear. Your losses also appear in this section. This is the longest section of the form, and additional pages might be attached if warranted.

The tricky part for you, the taxpayer, with a K-1 is timing. Unlike 1099 and W-2 forms, which are due to the taxpayer by the end of January (mid-February at the latest), a K-1 isn’t due until mid-March. Employers and banks know how much they’ve paid out to people by January 1st, so the 1099 and W-2 deadlines are reasonable. Since businesses need more time to file their tax returns, the K-1 isn’t due until March 15th. That gives you just a month before taxes are due.

If you actually own the business, you can prepare your own K-1 when you prepare your business taxes.

If you still have questions about your K-1, don’t forget TurboTax has tax experts who are CPAs, IRS enrolled agents, and tax attorneys available to answer your questions, free so you can file before the tax deadline.

The idea of income  can be complicated given the different types of pay a service member receives. First, you have your pay, then living allowances and moving allowances, travel allowances and then combat pay. Some are subject to tax and others are excluded, all must be reported. It’s a good thing you can use TurboTax Military Edition for your last minute tax filing so you can easily be guided through these special tax benefits and can keep more of your hard-earned money.

Here are 5 last minute tax tips for military that will help you save when you go online and file your taxes.

1.  Combat Zone Exclusion

If you are deployed in a designated combat zone, which are designated by an Executive Order from the President and listed here on the IRS website, then part of your pay is excluded from taxation. Afghanistan has been a combat zone since September 19, 2001. In practice, the income that is excluded as a part of this will not appear as wages on your W-2. If you look at your W-2 and it doesn’t match what you’re paid, it’s because of the exclusion. If you do have excluded pay on your W-2 and it shouldn’t be, then you need to get a corrected form from your finance office.

2.  Selling Your Home

This is not a military-only tip but given how often service members move, it’s one that you may be able to take advantage of. If you’ve lived in a home for two out of the last five years, you are allowed to exclude up to $250,000 of gain ($500,000 if you are married) on the sale of that home from your taxes. These are the same rules as for civilians but you can have the 5 year test suspended if you serve on qualified official extended duty.

3.  Travel Expenses

If you are a reservist and travel more than 100 miles away from home to perform your duties, you can deduct unreimbursed travel expenses as a miscellaneous itemized deduction. This can include all unreimbursed expenses from the time you leave home until you return, it’s limited to the amount the federal government generally reimburses employees for travel expenses.

4.  Forgiveness of Decedent’s Tax Liability

This is a bit of a sad tip, but if a member of the U.S. Armed Forces dies in active service in a combat zone or from wounds, disease or other injury received while in a combat zone or from a terrorist or military action, the tax for the year of death and potentially for prior years can be forgiven.

5.  Deferral of Payment

This last tip may be useful come tax payment time but if you are performing military service and you notify the IRS that your ability to pay the income tax has been “materially affected by your military service” then you can defer payment to 180 days after your termination or release from service. If you pay the tax in full before the 180 days, you will not be charged interest or penalty.

It’s great that the IRS made allowances for those who serve, especially in combat zones far away from home. I know that being away from your family and loved ones is hard enough, you don’t need it to be harder.

With these last minute tax tips, the ease of use of TurboTax Military Edition, and the ability to ask TurboTax tax experts your tax question while you file your taxes, free, there’s no reason to delay filing your taxes any longer.  The faster you file, the sooner you will get more money back in your pocket.

Military members who are ranked E-5 and below can file free.

When preparing your taxes there are a lot of simple and easy errors you can avoid with a little double checking and extra diligence. Also, one of the biggest reasons a tax refund is delayed is because of an error. Before you file your taxes, check out this list of common errors and correct them before you file:

1. Incorrect or Illegible Social Security Numbers

Double-check your Social Security numbers before you file. You need to make sure that you have the right numbers for you and your spouse, as well as for any dependents that you claim. Your EITC and other dependent related tax benefits could be at risk if you have the wrong Social Security number for your child.

Also, make sure your tax return is legible. Rather than filling out the forms by hand – making it easy to mistake the number 8 for the number 3 in your Social Security number, use tax prep software.

2. Forgetting Dependents

Don’t forget to claim dependents. In many cases, college students can be claimed by you. Also, if you have been caring for an aging parent, you can often claim him or her as a dependent. Think about those to whom you have been providing material support, and don’t forget to claim them as dependents.

Just make sure that no one else is claiming them as well. Each dependent can only be claimed on one tax return. So you need to work out claims with siblings if it’s your aging parent, or with your ex if you are divorced.

3. Overlooking Tax Deductions

Go through your expenses from the past year, and make sure you aren’t overlooking deductions. You might be surprised at what you can deduct, from job hunt expenses to moving expenses, if you meet the right criteria. Don’t pay more than you have to.

4. Not Taking Advantage of E-file

E-filing is a great way to file your tax return quickly (don’t miss the deadline!) as well as get your tax refund processed quicker. Plus, there is a reduced chance of mistakes on the IRS end if you E-file.

If you are entitled to a tax refund, you can get it much faster when you E-file. E-file combined with direct deposit is the fastest way to get your tax refund.  The IRS estimates that 9 out of 10 tax refunds will be processed within 21 days.

Most income is taxable income but there are some examples of non-taxable income and we’ll look at both.

Taxable Income

There are many types of taxable income. The income you earn from working as an employee is taxable, as is the income you earn when you are self-employed, or the income you receive as a business owner.

You are supposed to report income from wages, fees, commissions, tips, stock options and even fringe benefits. The fringe benefits you receive, even if you don’t receive cash, are taxable as income. Realize, too, that even if fringe benefits are given to someone else, or used by someone else, you are considered the recipient.

Investment income is also considered taxable. This includes income from the sale of investments; you pay capital gains on this income. You also pay taxes on income from interest earned on deposits, as well as from dividends paid out. Gains on collectibles sold (which includes physical metals) are also reported as taxable income.

You are also supposed to report and pay taxes on income from royalties. This includes royalties from copyrights, patents, and properties that produce mineral, oil and gas. Realize, too, that you pay taxes on bartering income. You will need to figure your gain for what you received in barter, although you can offset the income with the bartering services or items you provided.

Non-Taxable Income

There are a few income sources that aren’t taxable, here are some of them:
• Some disability insurance payments: While payments from a policy paid for by your employer are taxable, you don’t have to pay taxes on payments when you receive them from a plan that you pay for with after-tax dollars.
• Gift receipt: You don’t have to pay income taxes when you receive a gift. Taxes on gifts are paid by the giver – although the giver doesn’t have to pay taxes until the gift exceeds the exemption amount. Understand, though, that a prize isn’t a gift, and you pay taxes when you win a prize.
• Life insurance payout: You don’t pay taxes when you are the beneficiary of a life insurance policy.
• Municipal bond interest: When you invest in municipal bonds, they are most often tax-free at the federal level – and even usually at the state level (if you live in the state of issuance).

TurboTax will ask you questions related to your income to help you include your reportable income on your taxes.  If you still have questions, only TurboTax will let you speak to CPAs, tax attorneys, and IRS enrolled agents while you prepare your taxes, free.

Fortunately I never had to go through that experience. There are so many advantages to using tax software that I couldn’t possibly name them all. I will, however, name the three biggest reasons why I’ve never been tempted to do my taxes by hand.

With Tax Software No Need to Know the Tax Code

The number one reason why I think tax software is incredible is you don’t have to know the tax code. The software does it for you by asking you simple questions that you can answer. TurboTax walks you through the appropriate questions related to your tax situation and makes sure you don’t miss tax deductions or credits that you’re eligible for.

Tax Software Can Be Updated

This is especially valuable this year because of the fiscal cliff resolution that was passed earlier in the year. If you paper file, your printed forms may be outdated and while the IRS will still accept it, it might be confusing if you review them later on in the year or, should you need to, years in the future.  Tax software like TurboTax is updated with the latest tax laws.

Tax Software Can Collect Tax Information

My favorite feature in tax preparation software is the ability to pull in tax data from outside sources like payroll processors. Instead of having to type in all the data from your W-2, you can download it from a processor like ADP and save yourself time and headache, in case you enter in the wrong numbers.

Software, especially tax software, has really simplified our lives and reduced the potential headaches. If you have been doing them by hand, consider software.

TurboTax is up to date with all tax law changes, so you can file today and feel confident that your will get every tax deduction and credit you deserve.  And remember, if you have any questions, only TurboTax lets you talk to CPAs, enrolled agents and tax attorneys as often as you like while you prepare your return, free.

Job Hunting Costs

Did you start a new job in 2012? If so, you might be able to deduct the costs related to your job hunt. There are some rules, though:

• You can only take deductions if you were looking for a new job in the same field.
• You can’t take the job hunting deduction if you were looking for your first job.
• Your costs must exceed 2% of your AGI, and you can only deduct the amount over that 2%.
• There cannot have been a substantial break between when your old job ended, and you began looking for a new job.

If you meet those conditions, you can deduct the costs of career counseling, hiring a head hunter, resume help, cost of mailings and phone calls, and the cost of travel to go to job interviews. Remember, these are deductions from your income, when you itemize, and not a tax credit. What this means is that if you spend $500 for someone to review your resume, you don’t get $500 off your tax liability. You get $500 off as a deduction to the extent that all of these expenses exceed 2% of your AGI.

Other Unreimbursed Employee Costs

You can also take a tax deduction for costs related to your employment that you aren’t reimbursed for by your employer. This tax deduction is available whether you are an old job, in a new job, or starting your first job.

Some of the expenses that you might be able to deduct include:

• Depreciation on equipment, such as a cell phone or computer, that you bought in order to do your job.
• Dues to professional societies, unions, and chambers of commerce.
• Employment-related education costs
• The cost of obtaining licenses related to your profession.
• Travel costs related to a business trip, including passport fees.
• Tools and other supplies that you use for your work.
• The cost of uniforms, and how much you have to pay to keep them properly maintained.
• Subscriptions to trade magazines and professional journals in your field.
• Home office expenses, if you have a designated area exclusively related to work as you telecommute.

Once again, your ability to deduct expenses is subject to the 2% rule. So, if your AGI is $42,000, your costs need to be at least $840, and you can only deduct the amount above that number. So, if you spent $1,000 on employment related expenses, you can only deduct $160 from your income.

You can only claim expenses for which you were not reimbursed. If the company is paying for your cell phone, or if it covers your business travel expenses, you can’t deduct those. Anything the company pays for can’t be deducted from your taxes, it’s considered double dipping and is not permitted.

If you found yourself paying costs related to your new job, you might be able to reduce your tax liability to help offset some of your expenses to keep more money in your pocket.

TurboTax will figure out the employee deductions your eligible for based on your answers to simple questions.

Newlyweds

With reality comes taxes and the challenges that a newly married couple must face. Once the honeymoon is over, it’s time to start getting serious about your finances as a couple. And that includes getting your tax situation in order. Remember that your marital status is determined by your status on December 31. So if you marry on December 31, you are considered married for the whole tax year.

As the year draws to a close, and as you consider your new married filing jointly status, here are five tips to keep in mind:

1.  Change Your Name with the Social Security Administration

Changing your name on your Social Security Card is step one. You want the name the Social Security Administration has to match the name on your tax return. If you have changed your name as a result of the marriage, you need to make sure that is reflected with all of the proper agencies. You need to fill out and file a Form SS-5 with your local Social Security Administration office. You’ll receive a new card, but your Social Security number will remain the same.

If you didn’t change your name as a result of the marriage, there is no need to file with the Social Security Administration.

You’ll want to change your name at the SSA before you try to change it on your driver’s license or any other documents. It can save you a lot of time because the SSA document can be used as proof for the license, which is then used as proof for everything else (utility bills, banks, credit cards).

2.  Double Check Your Tax Withholding

Now that you have a new tax status, it’s important to review your tax withholding. Does your combined income with your spouse put you in a higher tax bracket? If so, you might not be withholding enough. TurboTax has a great calculator that can help you figure out if one or both of you need to make changes to your tax withholding amount. You want to make sure that you begin withholding more from your paycheck, or you could be surprised by your higher tax bill come April.

3.  Consider the Possibility of Filing Separately

In most cases, it makes sense to file jointly. However, depending on your individual tax situations this year, it might make sense to file as married filing separately – at least at first. Take the time to figure your taxes with both scenarios to see what your tax bill ends up being. You can re-evaluate your tax filing status next year to see if the best option has changed.  You can use TurboTax TaxCaster for free to check both scenarios.  TurboTax also makes it easy when figuring out both scenarios.

4.  Look at ALL Your Possible Tax Breaks

If you file jointly, your spouse’s tax breaks are yours as well. Make sure that you review ALL of your tax breaks from the past year. If you just got married, you might be able to take advantage of your spouse’s generous charitable donations to help lower your bill. Consider investment losses, dependent care credits, education credits, mortgage interest, and other tax breaks. Go back through the finances for both of you and identify your joint tax breaks – and see if you have time to rack up a couple more tax breaks before the end of the year.

I’ve always found that the simplest way to do this is with software. Tax preparation packages make this dead simple because they walk you through everything – trying to figure it out by reading IRS publications is usually a time consuming and difficult process.

5.  Understand that Same-Sex Couples Can’t File Federal Taxes Jointly

Same-sex newlyweds need to be aware that they can’t file their federal tax return jointly. The Defense of Marriage Act, passed in 1996, prohibits federal recognition of same-sex couples. So, even if same-sex marriage or civil unions are legal in your state of residence, as far as the federal government is concerned, they are not recognized. Same-sex couples have to file as single when filling out a federal tax return.

These are just a few of the tax tips I’d give my newly married friends.

With the holiday season fast approaching, it is common to ramp up the spending. While many people enjoy the holidays, it can also be stressful, since holiday spending can put increased strain on your finances.

Holiday Savings

Before things really get underway with your holiday spending, consider some of the impacts that this time of year might have on your pocketbook.  Here are 5 finance tips to help you counteract them this holiday season:

1.  Make a List

One of the best things you can do in any financial situation is to make a list. Look ahead to what you will actually buy. From presents to decorations to special foods, consider your potential purchases. Make a list – and then stick to it.

It can be very easy to buy on impulse during the holiday season. If you want to limit your impulse spending, a list can be a great way to do so. Plus, the list will help you quickly identify sale items.

2.  Plan for Sales
Once you have a list, you can begin planning your shopping patterns, and make purchases of items when you see them on sale. Compare your holiday shopping list with sales flyers and promotions. Don’t forget to look online for special pricing and sales. You’ll save money on your purchases and experience less stress for your bank account.

3.  Use a Rewards Credit Card to Make Purchases
You can offset some of your costs by using a rewards credit card for purchases. Some credit cards are even running special chances to earn extra points during this time of year. You might get bonus rewards for buying toys, or for making grocery purchases. Find out what promotions can help you maximize your rewards. You could get some of your holiday purchases for free when you are savvy about your credit card use.

4.  Create a Plan to Pay Off Your Purchases
You will need a plan to pay off your purchases – especially if you are using a rewards credit card. The use of a rewards card shouldn’t be an excuse to spend more than you should. Instead, you should only spend what you had planned. Then, you should pay off the card as soon as possible. The best results are achieved if you pay off your credit card bill immediately, at the end of the billing cycle, so that you aren’t charged interest. If you do end up carrying a balance, make sure you have a plan to pay it off in no more than two months. High interest can offset the value of your rewards the longer you carry a balance.

5.  Start Getting Ready for Next Year
If you really want be ready for the holidays, use the entire year to prepare your finances. This can mean the least amount of stress for your budget during the holidays. If you decide to prepare from February to November, you will end up with 10 months to get ready. Set aside money each month, putting it in a high yield account that you use as your “holiday fund.” Use your spending this year as a guide.

If you prepare all year, whether you set aside money or look for gifts to purchase throughout the year, you won’t have one big rush to spend during the holidays. Your budget will thank you.

When it comes to insurance, it can be disappointing to realize that you are not going to receive payment on your claim. In these cases, it’s possible to take a tax deduction for the loss you suffer to your property if you are not compensated by insurance and in some special cases waiting for compensation. This is known as a casualty loss.

Natural Disaster

What is a Casualty Loss?

The government defines a casualty loss as damage to, or destruction of, property due to a sudden event. In order to qualify as an eligible “sudden event,” it must be something that is unusual, identifiable, and unexpected. Some of the events that can qualify you to take a casualty loss include:

• Hurricanes
• Floods
• Storms
• Car accidents
• Earthquakes
• Shipwrecks
• Volcanic eruptions
• Terrorist attack
• Tornadoes
• Vandalism
• Fire

If your claim is denied, and the insurance company doesn’t pay it, you are allowed to deduct a portion of your losses from your income. This can be a way to reduce your tax liability, and recover, to some degree, your losses.

Not everything is considered a casualty loss for tax purposes. Accidental breakage or damage, deterioration over time, damage that comes as a result of willful negligence, arson committed on behalf of the taxpayer, and pet-related accidents are not eligible for this take deduction.

Taking Your Casualty Loss Tax Deduction

You can only claim casualty tax losses if your loss amounts to more than 10% of your adjusted gross income. The IRS requires that insurance reimbursement and an additional $100 are also deducted from the amount you are claiming when taking your casualty loss deduction. You don’t have to worry about the details when claiming the casualty loss, TurboTax will make all of the calculations for you and walk you through the appropriate questions, but here is an example:

Your home is damaged by a tornado. Your home was documented to have a $50,000 reduction in fair market value, but your adjusted cost basis was $20,000. So, now you have to go off the lower amount — $20,000. On top of that, you have tornado insurance that covers $10,000 of the damage. So, what’s left that was unpaid as part of your claim is $10,000. You subtract $100 from that number to end up with $9,900. Now, consider your AGI. If your AGI is $45,000, 10% is $4,500. You can deduct the portion of your loss above the $4,500, so you subtract that number from $9,900. Your total deduction is $5,400.

Special Treatment for Federally Declared Disasters

Generally casualty losses are deductible in the year the casualty occurs, however if you suffer casualty loss due to a federally declared disaster that occurs in an area requiring public or individual assistance, then you can treat the loss as having occurred in the year immediately preceding the tax year in which it happened, and you can deduct the loss on your tax return or amended tax return for the year before.

So for instance, if you were a victim of Hurricane Sandy and you already filed your 2011 tax return, you can amend your 2011 tax return and claim your recent loss earlier since your insurance company may take a while.  You may even receive a bigger tax refund for 2011.

If you are expecting reimbursement for part or all of your loss, you have to subtract the expected reimbursement when figuring your loss, even if you are not expected to receive payment until next year.

Deducting a casualty loss isn’t the same as getting a dollar for dollar reduction in your taxes. However, it does provide you with a way to ease some of the pain related to your situation, and help you offset some of the costs that the insurance company has not paid.

Tax Form Checklist

When filing taxes, it is important to make sure that you have all the documents that you need. The good news is that for simple tax filers there isn’t a whole lot that you need. If your taxes are relatively simple to prepare, here are the documents that you should gather in order to be properly prepared:

• W-2: Gather up any W-2 forms. This is the form your employer issues to you in order to let you know how much you made during the year. This form also includes how much money was withheld in taxes, as well as any amount of money withheld for other purposes.

• 1099: You might have 1099 forms if you did work on the side. Also, there are different versions of the 1099 form for interest earnings, dividend earnings, and other sources of income that you need to report.

• Other income information: Don’t forget about other income you might receive, such as alimony.

• 1098: If you have been paying mortgage interest, this is the form that shows the amount of mortgage interest you paid and can deduct.  It may also show property taxes you paid and can deduct.

• 1098-E: Details your tax deductible student loan interest payments paid over $600.  If you paid less than $600 you may not receive a 1098-T, but don’t forget your interest.  You can still deduct it.

• 1098-T:  Details tax deductible eligible education costs you paid for higher education.

• Supporting information for tax credits: If you are eligible for tax credits, you will need to get information from supporting documents. Whether it’s a credit for installing solar panels, or information needed to claim a dependent care credit, you will need to refer to related documents. For example, you need the tax ID number for facilities that provide dependent care.

• Social Security numbers for family members: In order to file your taxes, you need your social security number. You also need the correct social security numbers for your spouse, as well as for anyone you are claiming as a dependent.  This information is necessary if you want to take the Earned Income Tax Credit and other available tax credits for dependents.

• Contribution information: Don’t forget information about retirement plan contributions that may be deductible.  Also, if your state offers you a tax benefit for contributing to a 529 plan, you’ll want that for your state taxes (it doesn’t apply for your federal taxes).

• Receipts: Charitable contributions require receipts. If you are itemizing and want to deduct charitable contributions, or if you have other tax deductible expenses, you need proper receipts to fill out information when preparing your tax return.  You don’t have to include these receipts with you tax return, but you need to keep them for your records to prove your donations or other expenses.

The basic rule of thumb for documentation is: If you claim it on your tax return, get the documentation to back it up.

If you follow this checklist and prepare your taxes using TurboTax, preparing your tax return will be even easier.

Tax Refund

Why You Should File (Even if You Don’t Think You Have To)

Even if you don’t think you make enough money to file an income tax return, it’s still a good idea to file. There are some circumstances in which you might actually be eligible to get some money back, and if you don’t file your tax return, you won’t get that money. Here are two good reasons to file:

1. Tax withholdings: Is your workplace withholding money from your paycheck for federal income taxes? If so, then the government may owe you money. If you want that tax refund from your withholdings, you need to file a tax return.

2. Refundable tax credits: There are a number of tax credits offered to those with lower incomes. These tax credits are refundable, or partially refundable, meaning that you may get excess money refunded even if there is no tax liability to apply the tax credit to.

Credits like the Earned Income Tax Credit and the Child Tax Credit can mean more money in your pocket. The average EITC is $2,000.  Each year, there are different tax credits and opportunities and TurboTax gets you the refundable tax credits available if you qualify. It’s worth it to file a tax return in order to get that money.

Filing your tax return is one way to make sure that you are getting the money that you are entitled to. Double-check your situation. Even if you don’t have to file a tax return, it might be to your financial benefit if you decide to file anyway because of over withholding and refundable tax credits.

Who Should Take Education Tax Benefits

Is the Student a Dependent?

First of all, you need to determine if the student is a dependent. If a parent claims his or her student as a dependent, then that’s who gets to take the tax credit or education deduction. Whether it’s the American Opportunity Tax Credit, Lifetime Learning Credit, or the Tuition and Fees Deduction, only one person gets the tax advantage and it often comes down to whether the student is a dependent in the eyes of the IRS. If a student is a dependent on someone else’s tax return, the student doesn’t qualify for these tax breaks.

If a student isn’t claimed as a dependent, though, it’s possible for him or her to claim an education tax credit, or take the deduction.  One thing to keep in mind, each student cannot claim more than one tax break. So it’s one of the education credits or education deduction (not all of them).

Should the Student Take the Tax Credit or Deduction?

In some cases, it makes sense for the student to take the tax break. If the student is married, and no longer dependent on a parent for support, obviously that’s who should take the education tax break. Additionally, if the student makes enough money to owe taxes, it makes sense to reduce that tax bill as much as possible.

Most of the time, though, students don’t earn enough money to owe taxes. As a result, in many cases, it makes more sense for parents to claim their children as dependents and reap the benefits of the tax breaks. After all, parents have spent quite a lot to raise their children, and probably help pay for college. It’s only reasonable that they receive some sort of financial benefit in return – and a lower tax bill is one way to recoup a few of those costs.

Once you have made your decision about who will claim the education tax benefit, TurboTax will figure out which education tax credit or deduction you are eligible for when you prepare your taxes.

Education Expenses

If you are looking for a way to offset some of your education costs, the government offers some tax credits and deductions designed to help students and their parents. While these tax breaks won’t completely cover the cost college, they can reduce some of the pain involved.

American Opportunity Tax Credit

The American Opportunity Tax Credit is offered to students who pay qualified tuition (and aren’t claimed as dependents elsewhere), as well as to parents who pay expenses for their dependent students or themselves. Replacing the Hope Credit, the American Opportunity Credit offers some modified rules, which make it available to more students. Normally, the Hope Credit only allowed you to use it on the first two years of post-secondary education, and the modification allows for up to four years, as well as raising the income limits, and expanding qualified expenses.

The popular American Opportunity Credit was set to expire at the end of 2010. However, it has been extended through the end of 2012. This tax credit allows you to claim up to $2,500 per student. The full credit is available for individuals with a MAGI(Modified Adjusted Gross Income) of $80,000 or less, $160,000 for married filing jointly. It is 40% refundable, meaning that you can get up to $1,000 back even if you don’t owe taxes.

Lifetime Learning Credit

Rather than limiting your ability to get tax credits for education expenses for the first four years of college, it’s possible to use the Lifetime Learning Credit to offset your expenses even in graduate or professional school. As long as the educational institution is qualified, undergraduate or beyond, you can qualify for up to $2,000 in tax credits for your expenses. It’s figured on 20% of your tuition and fees, up to the first $10,000. There is a phase out as you reach certain income levels. Parents can claim this for dependent students.

Deduction for Tuition and Fees

Unlike the credits, which are dollar for dollar reductions in how much tax you owe, deductions reduce your income. You still receive a benefit; it just isn’t as pronounced. You can take a deduction for up to $4,000 spent on college tuition, and on related expenses.

Limitations to These Tax Breaks

Realize that there are limitations to the tax breaks you can take. If you claim the Tuition and Fees Deduction, you can’t take any of the credits. Additionally, you can’t claim the American Opportunity and Lifetime Learning credits for the same student in the same year. If you are a parent with multiple dependent students, you can spread these credits around a little bit to maximize your return.

Carefully consider your tax situation as you decide what is best. Remember that a credit is far more valuable than a deduction. For example, a $2,000 tax credit means a direct $2,000 reduction in tax liability. A deduction reduces your taxable income, so assuming you are in the 25% tax bracket, you would need a $8,000 deduction to get the same reduction in liability as a $2,000 tax credit.

Finally, don’t worry about figuring out which education credit or deduction to take.  TurboTax easily chooses the best option for you depending on your eligibility.

Finding Unclaimed Property

What is Unclaimed Property?

What qualifies as unclaimed property varies according to state. For the most part, insurance companies, investment companies, utilities, banks, and other business (like medical testing businesses), are required to turn over inactive accounts. This property is considered “unclaimed” or “abandoned.” If you can prove you own the property, you can claim it for your own.

Here are some examples of what might be considered unclaimed money or property:

• Uncashed paychecks
• Investments
• What’s in a safe deposit box
• Savings and checking accounts
• Accounts at failed banks and credit unions
• Payments you are owed from various businesses (such as with pharmaceutical trial participation)
• Positive utility accounts that still contain money after you’ve disconnected
• Unused gift certificates/gift cards (but only in a few states)

Many states use this money to fund various operations. The money is still yours, but states can earn interest on it. Once you prove that you own the money, you can claim it, and the government will turn it over.

Locating Your Unclaimed Money

It’s possible to fairly easily locate your unclaimed property, if you have any. One of the best places to look is MissingMoney.com. This site lists unclaimed property held by states, where the money came from, and how much is available. It’s also possible to use the Treasury Hunt tool at TreasuryDirect.gov to find out if you have unclaimed savings bonds.

The FDIC and NCUA offer tools for finding money at failed financial institutions, and the Pension Benefit Guaranty Corp also provides information about abandoned defined-benefit plans, and the National Registry of Unclaimed Retirement Benefits offers something similar for 401(k)s. Sometimes, you’ll actually be called in the event of a forgotten account.

Claiming Your Money

In order to claim your money, you will have to prove you are the true owner, through documentation. In some cases, the unclaimed property you find actually belonged to someone who has passed on. In that case, you will need to show a death certificate, and prove that you are an heir, and authorized to collect the money on behalf of the estate. Once you locate your unclaimed property, find out from the agency that has it what you need to show as proof of your right to it.

Realize that you don’t need to pay anyone to claim your property. There are firms that can track down your unclaimed property and help you get it back, but these are completely unnecessary. You can get the information for free, and there is no reason to ever pay anyone to get what’s already rightfully yours.  The best step to take is to go to directly to your State Controller’s website.  This is the single best source to check and see if any money being held by your state belongs to you.  Your state’s site will direct you on the proper steps you need to take to collect your money.

With a few minutes of digging, you can find out if you have unclaimed property waiting for you. It’s not a bad way to spend a little time, and you just might profit from it.

Free Activities

Here are five tips you can use to save money on kids’ activities:

1. Break Out the Crafts

One way to keep your kids occupied, especially on rainy summer days, or days that are too hot to go out, is to break out the arts & crafts. You can find inexpensive craft supplies, including glitter, pipe cleaners, Popsicle sticks, and glue at the craft store. Keep a craft box, and whenever the kids start to complain of boredom, ask them to create something. This stimulates their creative juices and helps them work their minds as well as their hands.

2. Encourage a Creative Endeavor

Another option is to encourage other creative endeavors. Ask your children to put on a play for you. Encourage them to write it, assign parts, and then perform it for you. Costumes can come from old clothes, and they can design small set pieces with what you have at home. They can spend time each day in this endeavor, and it should be good for at least a week of low-cost activity. This can work for musical compositions (encourage them to put on a concert for you as a “kitchen band”), novels, and other creative attempts. It doesn’t have to cost much, and it will keep them busy with practices as they use their imagination to fuel their entertainment.

3. Take it Outside

There are a number of ways that kids can enjoy themselves outside. You can turn on the sprinklers and let them run through. Send them on a scavenger hunt through the neighborhood. Invite other kids over for a game of outdoor hide and seek. There are a number of ways that your kids can enjoy inexpensive fun, if you head outside for a little while, and it gets them much needed exercise at almost no cost.

4. Look for Community Programs

Many communities offer free or low-cost activities. Look for free historical tours, discounted museum days, and free activities in the park. Check your local community center, the city’s recreation department, and other resources for information about free and low-cost activities. From $1 matinees, free summer movies, family night at the municipal pool, to free summer reading programs at the library, there are a million options when it comes to low-cost community programs.

5. Create a Learning Schedule

You can reduce the amount of time that your children need to be entertained by putting together a summer learning schedule. Consider having your child read for a portion of each day or practice a musical instrument (this might not be as frugal depending on the instrument). You can even set up math games on the computer and require your child to play them for half an hour. It might be important to focus on the fun rather than the “summer school” like nature of creating a learning schedule!

Encourage involvement in programs like 4-H and Scouting that encourage practice with a skill and learning. These low-cost programs can help your child be occupied with something beneficial, reducing your need to provide non-stop entertainment. Make sure your child engages in learning some part of each day, and you’ll have less to worry about in terms of costly activities. Not everything has to cost money!

We all have important documents. From the title to your car or house, to birth certificates,  Social Security cards, and tax returns. We have to protect those important records and documents. You want to make sure that you can access these records when you need them, but you also need to make sure they are safe from the ravages of natural disasters.

Natural Disaster

If your home sustains damage because of flood, fire, tornado, earthquake, or act of God, you want to make sure that your important records aren’t destroyed in the process. One way to do this is to purchase a properly rated safe. There are safes designed to withstand fire and flood. Your original documents can be well protected. But what happens if you can’t access them when you need them? The answer is to keep an electronic copy in a safe place.

Keep Your Records Electronically

One way you can improve your ability to keep your records safe and accessible is to keep them electronically. Many investment brokers, banks, and even insurance companies provide electronic copies of important documents and statements. In this case, it’s often possible to access at least 12 months (or more) worth of information online.

You can also create your own electronic files. Just scan your original documents to create an electronic copy. You can keep these on a flash drive separate from the originals. You can keep it in a safe deposit box at the bank or a safe at your home (unless that’s where your paper copies are). It’s also possible to back up your files using secure cloud storage services. Even emailing them to yourself can create an easily accessible backup copy available where ever you have Internet access.

Protecting Your Electronic Files

Naturally, since these are all sensitive documents, you will be concerned with security. The downside to storing your files electronically is that you run the risk of someone seeing your files. You can reduce the likelihood that someone will see sensitive personal financial information by encrypting the files and/or protecting them with a password that would be difficult for others to guess. This will make it more difficult for others to access your information, but it still leaves it largely accessible to you, with a little extra effort.

When protecting your electronic files, it’s important to make sure that the information is regularly updated. When you make changes to beneficiary information, or if you do something new with an account, you should make sure that you have the most up to date records. Using an external hard drive or flash drive can help you overwrite old information, as can online storage. Burning to disc can be effective, but you might need a new disc each time you change your information.

Lastly, you need to know that your important documents are safe and accessible. Keep originals in a good safe, but also consider keeping electronic copies. You might eventually need the originals of your important papers, but if they are buried under the rubble of your home, the electronic record that you have stored in a secure cloud drive online might suffice until your records are available. Take the proper steps to protect your information, and you will be prepared in any emergency.