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Contribute More to Your 401(k)

Did you know you can do yourself a (double) favor by contributing more to your company’s 401(k)? How? When you opt in and have a portion of your income set aside for the account, it’s done pre-tax. That means you’re lowering your taxable income for the year while putting money aside for your retirement. It’s a win-win.

If you haven’t contributed enough to get a full match from your employer, see if you can at least increase to that amount. That’s extra money that’s free and can go a long way towards your retirement with the power of compound interest.

Take Advantage of Flexible Spending Plans and Health Savings Plans

If your employer offers a Flexible Spending Plan or a Health Savings Plan and you’ve signed up for it, make sure you’re taking full advantage of it. They are considered tax favored plans because your contributions are pre-taxed- this allows you to get reimbursed for medical expenses while lowering your taxable income. Keep good records and all your receipts. Check to make sure you’re not wasting any of your contributions by making sure you have qualifying medical expenses.

While most jobs having open enrollment in the fall, you can still keep track of your medical expenses through out this year so you can plan for the next year.

Adjust Your Withholding on Your Paychecks

Depending on your needs and particular situation, you have some choice with your withholding on your paychecks. If you received a big tax refund last year and expect your finances to remain the same this year, you may elect to adjust your W-4 and have less taken out of your paychecks. That means getting a smaller tax refund next year, but having a small bump in your paychecks through out the year.

If you’re expecting a major event this year such as getting married or becoming parents, then you should consider sitting down with your Human Resources Department to update your withholdings.

Thoughts on Preparing for Taxes

I’d love to hear from you about your taxes and finances. How was this past tax season for you? What plans do you have for the rest of 2013?

Michael Rubin CPA, CFP- Total Candor

My favorite end of season tax tip is the “once (again) over.”  While your tax return should be completely accurate throughout, you should double check a few things before you send your tax return to the IRS in a rush the night of the 15^th.   Make sure at least the following are 100% correct:

• All Social Security numbers
• All wages and withholding from the W-2’s you received.  Double-check your employer’s EIN too while you’re at it.
• The total gross proceeds from all of your investment sales, if you have any
• Mortgage interest from Form 1098, it you itemize
• The routing and account numbers of your bank account if you are expecting a tax refund or if you will have your payment due automatically withdrawn.

Phil Taylor, CPA – PT Money

My favorite end-of-season tax tip is to make a contribution to a Traditional IRA before you file. If you are eligible to make a tax-deferred contribution to a Traditional IRA, and you do so before you file your taxes, the contribution can be designated as previous year.  Meaning, you can deduct the current year contribution on your tax return you are filing for the previous year. For example, a $5,000 contribution to a Traditional IRA on April 15^th, 2013 would net a $1,250 deduction from someone in the 25% marginal tax bracket on his or her 2012 tax return. This is a great way to save for your retirement and save on taxes at the same time.

Jim Wang – Bargaineering

Maintain a list of all the documents you received this tax season. This will help you remember to include important documents this year if you haven’t yet filed and next year as the documents start coming in the mail and you wonder whether or not you’ve received everything in order to do your taxes. You should have a list of every institution that sent you a 1099, such as 1099-INTs from all your bank accounts that paid out interest, as well as other forms such as K-1s from partnerships and W-2s from your employer(s). Then, as the documents come in, you can use your list as a checklist to see who else is left. Remember to amend that document if you close accounts or add new ones.

Once you file your 2012 tax return, you won’t need many of the documents you used anymore. Scan them and shred the paper copies. If you are a little paranoid, keep the paper copies for, at most, six years (that’s the period of limitations if you fail to report income) and then dispose of them. Having an electronic copy is almost always as good as a paper copy so scan, shred, and recycle the old documents. When you scan them, make sure to store them in a secure location with adequate backups.

Elle Martinez – Couple Money

With the peak of tax season just about wrapped up, my tax tip for everyone is to review and automate. Once our taxes are submitted and we take a week or so to get our minds off of them, we then plan ahead on how we can improve for filing next year.

Using TurboTax for the last few years has actually made it easier to look over all the numbers and we can compare how did this year to how we did last year. Since we file for both personal and business, I use that data as motivation to be more organized with so I can find all the receipts and paperwork I need.

On the personal side we need to have a system for our donation receipts for when we go through possible deductions that we may qualify for. As for my business, I have to refine my storage so I can pull out supply receipts easily come tax time.

Besides keeping receipts our review for the past year showed that we can invest a little bit more for our long term future. We’ll taking advantage of  starting our toddler’s college fund and contributing more to both of our IRAs. Having this review also meant that we shopped around to found a brokerage that can manage our IRAs with lower costs than we’re currently using. Hopefully by the end of the month we’ll have that all finished.

If you’re doing it by hand (this year will be my 29th return filed using TurboTax, but I’ve read some people still use pen and paper) check your math. It’s easy to transpose numbers or make a simple arithmetic error. Don’t risk interest and penalty for such a simple error.

If you spent time volunteering, the time itself isn’t a deduction, but you may be able to take a deduction for the miles driven. A weekly round trip of 20 miles  can add up at the current rate of $0.14 per mile. If you already itemize, this adds a bit to your potential tax refund. Remember, any cash donations must be acknowledged by the charity in writing before you file your return.

If you have a deduction from your paycheck to a charity, don’t forget to include this. This is a valid tax deduction even though you may not receive a direct acknowledgement from the end charity. Your final pay stub for the year should show the total donation you’ve made.

You know that real estate tax is tax deductible, but don’t forget the tax you pay each year for your car or boat also counts as personal property tax. It may be a couple hundred dollars added to your tax deductions.

Did you refinance again in 2012? If you paid any points on the new loan, you can deduct the points over the life of the loan. The good news is that if you were taking the partial points deduction for the prior loan, you now get to deduct the balance. With how rates dropped to record lows last year, this affects many people who were serial refinancers.

Did you purchase stock in your company at a discount and then sell it for a gain in 2012? The cost listed may not be what you paid. That discount was included on your W2 as ordinary income and should be added to your cost basis when you sell. It’s common to buy stock at a 15% discount, so be careful to check your records, and not let yourself be taxed twice on that discount.

I can’t end a last minute article without mentioning IRAs. Nearly everything on your return has already happened, income, stock sales, 401(k) deposits, and so on. Dec 31st came and went. The IRA is one of the few exceptions to this rule, you can still deposit, until April 15th, up to $5000, or $6000 if you were 50 or older in 2012, and have it count for your 2012 return.

If you converted any IRA money to a Roth IRA, you may be able to still recharacterize any or all of that conversion back to the traditional IRA if you decide it will be in your best interest while reviewing your tax return. This is one of the rare chances at a financial “do-over” and can benefit you if the converted shares fell in value or if your marginal tax rate was higher than you anticipated.

Lastly, go online and prepare your tax return.  TurboTax will help you get all of the tax deductions and credits you’re eligible for and help you keep more of your hard-earned money.  You can e-file up until 11:59 on April 15th if you go online, but the sooner you finish the quicker you can get your tax refund.  If you still have questions, you can get your questions answered by TurboTax tax experts who are CPAs, IRS enrolled agents, and tax attorneys, free.

If all else fails, you can file for an extension with TurboTax Easy Extension. This doesn’t buy you time to pay your tax bill, just some extra time to get your paperwork together. You’ll want to take what information you have and make the best estimation of what you’ll owe and send it with the extension request.

Comment and let me know if I helped you catch a potential mistake or oversight on you return.

There are two major categories of tax credits that can boost your tax refund—non-refundable and refundable.  A non-refundable tax credit can reduce your total income tax liability (the amount of federal income tax you owe for the entire tax year) to zero – but not beyond.  A refundable tax credit will pay excess beyond your tax liability.

Let’s take an example. Say your income tax liability is $950, but that you qualify for a $1,000 non-refundable credit.  If so, your income tax liability would be wiped down to zero.  However, because it is a non-refundable credit, your tax liability can’t become negative.  On the other hand, if the $1,000 credit you qualified for was refundable, you would be paid by the government $50 in excess of the $950 tax liability.

When you file your taxes in the next couple of weeks, here are five popular refundable and non-refundable tax credits that you may be eligible for:

We’ve laid out 6 last minute tax tips to help you streamline your tax preparation and keep more money in your pocket.

1.  Prepare and Organize

Take  time and gather all of your necessary paperwork, forms, receipts and checklists.

Even though TurboTax ask you questions to determine if your eligible for tax savings, anything that deals with your income, your donations, your deductions, your receipts – anything at all – will help you save time if it’s collected before you begin preparing your tax return.

If you’re filling out your tax paperwork on your own with paper and pen, make sure you double and triple check all of your financial entries, your income declaration, and your math. One of the great things about tax software like TurboTax is that the math is calculated for you and you don’t need to know tax laws.

2.  Correct Spelling, Numbers, and Everything!

You could list out the top twenty errors simply by being reminded about spelling your name correctly, your dependents names, your employers, your social security number, employer’s numbers, addresses…the list goes on and on.  TurboTax can help you eliminate some of these errors with the ability to import your W-2 information from your payroll provider and financial institution.

Here’s the key to preparing your taxes- don’t rush, make sure you spell everything correctly, don’t skip anything, and double check your answers.

This also includes correct account numbers, bank routing numbers, and credit card numbers if you request a direct deposit refund or if you owe more and you’re paying with a credit card.

3.  Know Your Dependents

Ok, this one seems to be obvious, but it always creeps up on the IRS top ten tax filing mistakes leader board. Its vital to get this information right.

Next to filling in your name and social security number correctly, the government absolutely needs to know if you have any dependents you will claim.

It’s important to know who your dependents are and double check that they qualify as such. It’s important because if your dependents are left off your tax forms, you’re missing out on valuable tax credits and deductions. Also, adding a dependent that someone else is claiming is not allowed.  Only one person can claim a dependent.

4.  E-file and Direct Deposit

If you want to avoid  tax errors and get your tax refund as quickly as possible, ditch the paper and pencil and go online and e-file with direct deposit.  You will avoid mathematical errors and the IRS estimates that 9 out of 10 taxpayers will receive their tax refund within 21 days when e-file is combined with direct deposit.

5.  Get Help

If you are preparing your taxes in the 11th hour of April 15th and you still have tax questions, you can ask TurboTax tax experts your question while you prepare your taxes, free.

6.  One Final Reminder

If you’re signing electronically, make sure to correctly type in last year’s AGI (when you’re prompted).

My guess is that people are so joyful and exuberant as they complete the last section of data on their tax forms that they may forget this information, as they’re jumping through the air in slow motion as the party poppers pop and confetti rains down.

Using TurboTax and these last minute tax tips, will help you easily file your taxes before the tax deadline and save money.

Good luck!

Investing has never been easier than today with all the options available for people to really use their savings to achieve the dreams and goals for the future. No savings to become a smart investor? Consider your tax refund to start investing in the stock market like a professional.

According to the IRS, the average tax refund in 2012 was about $2,803 and that is more than enough to open a brokerage account and start investing your savings for the future. In fact you can start investing with a lot less.

It is an interesting year for investors. After the Financial crisis of 2008 and 2009 the stock market has recovered and now we are in what experts call a “bull market”, a market in which prices of company’s stocks are rising and investors are encouraged to buy shares.

The performance of the stock market is remarkable. From the bottom of the market in March 2009 to February 2013, the price of stocks has risen 89% based on the S&P 500, the stock index composed by the leading 500 companies in the US. That represents an impressive average annual return of 17% in the last 4 years.

That return outperforms by far other investment alternatives such as bonds, money market funds, certificates of deposit or real estate. However, there is more risk involved when investing in the stock market. That means the returns change a lot from one month to the next or even from one day to the next.

But the stock market is a good alternative to achieve long term goals such as retirement when the risk is properly managed and balanced with your age and goals.

Your tax refund could be your pass to the world of investments:

-As soon as you get your tax refund this year, go to an investment brokerage firm or even your own bank and open an Individual Retirement account (IRA). An IRA is a vehicle in which you can invest your money and obtain a tax advantage: every dollar you put  in the IRA is reduces  your taxable income so you pay fewer taxes as you invest your savings.

-When you have your IRA, you can pick mutual funds to invest your money in. A mutual fund is a collection of stocks, bonds and cash alternatives. The Mutual Fund manages the money from many investors (hundreds or thousands) and that allows the small investor to have their money managed by professionals.

-You can pick among thousands of different funds with different objectives. There are funds for stocks, for bonds or funds that invest in a mix of stocks and bonds.

-Your selection of the fund depends on the risk you are willing to take with your money. For instance, stocks are riskier than bonds. However, in the long run the annual return for stocks tends to be higher. And you will need a higher return to achieve long term goals like retirement.

-How much risk can you take? It all depends on the time you have to achieve the goal. If you have 20 years for retirement, you can take a lot more risk than if you plan to retire next year.

-The tax refund is only the starting point. Once you open the IRA account you should sign up for automatic investments to contribute every month to the IRA account.

-Your finances are going to be transformed because you will be officially an investor with real long term goals.

- Haven’t filed your taxes yet?  Go online and file your taxes so that you can get your tax refund as soon as possible, make these smart investment moves with your tax refund, and keep more of your hard-earned money.

Above all else, try to come up with a plan for the tax refund money before you even receive it. One of the worst things that can happen is you don’t have a specific goal in place for the money and it just gets deposited into your checking account.

It sits there and slowly, day by day, you chip away at the money without even realizing it. A few months later it’s gone and you’re not even sure where it went. So, don’t let this happen to you and come up with a use for the money before you have a chance to spend it.

Knock Down Debt

If I told you about an investment that had a guaranteed return of 15-30 percent or more, you’d probably view that as a little pot of gold and would like to invest, right? Well, if you carry a balance on a credit card, you can achieve these rates of return easily.

Most credit cards have an annual rate of anywhere from around 12 percent all the way up to 30 in some cases. Any balance you leave on that card will rack up those finance charges. For example, carrying a $2,500 balance on a card with a 25% APR will cost you $625 in interest a year!

That’s a lot of money being spent on nothing but the privilege of using a credit card and not paying it off right away. So, if you’re getting a tax refund this year and you’re carrying any high-interest credit card debt, one of the best things you can do is to use it to pay down the debt. It’s the easiest way to generate your own personal pot of gold even if you don’t see the total benefit immediately.

Padding Your Golden Years

What if you don’t carry credit card debt? There are still a few good uses for that tax refund. Chances are you haven’t been maxing out your IRA or 401k, and that’s OK. It’s difficult to fully fund these accounts with so many other financial obligations, but it’s something that should not be overlooked or pushed to the back burner just because retirement may be a few decades away.

If there’s tax refund money coming your way, consider dumping it right into an IRA or bump up your 401k contribution at work to make up for the extra money. If you thought paying off a credit card with a tax refund provided a good rate of return, you haven’t seen anything yet. Take that $2,500 tax refund and stick it into your retirement account. Even if you only see a modest return of around 5 percent a year, this year’s tax return would turn into a $8,500 pot of gold in about 25 years.

That may not seem like a lot, but what happens if you take your $2,500 tax refund each year and do the same thing? Now you’re thinking. If you did this, in 25 years your pot of retirement gold would be over $130,000. Think about that for a minute. All you’re doing is taking your tax refund money, that typically gets spent on odds and ends, and significantly padding your nest egg with virtually no effort.

Have a Little Fun

Paying down debt, saving for retirement, or building an emergency fund are not exactly the most exciting things to do with your tax refund money, but the results over time are more than worth it. If your financial house is pretty much in order already, then having a little fun with the money isn’t a bad idea if done right.

Instead of blowing it on a new laptop, television, or other gadget that will be thrown to the curb in a few years, think about long-lasting lifestyle upgrades like making sensible home improvements, which will not only provide enjoyment while you’re living there, but can increase the value of your home, which can put more money in your pocket when it’s time to sell.

Haven’t Filed?  You Can Still File so You Can Get Your Pot of Gold

If you haven’t filed your taxes yet you can still file so you can get your tax refund.  TurboTax will help you get the tax deductions and credits you deserve and help you keep more of your hard-earned money and turn it into a pot of gold.

Invertir nunca había sido tan fácil como ahora gracias a todas las opciones disponibles para que la gente  realmente aproveche sus ahorros para lograr los sueños y metas para el futuro.

¿No puede ahorrar para convertirse en inversionista? Considere su devolución de impuestos para empezar a invertir en la bolsa como un profesional.

De acuerdo con el Servicio de Impuestos Internos (IRS), la devolución promedio de impuestos en 2012 fue de cerca de $2,803. Esa cifra es más que suficiente para abrir una cuenta de inversiones y empezar a invertir sus ahorros para el futuro. De hecho, es posible empezar a invertir con mucho menos.

Es un año interesante para los inversionistas. Después de la crisis financiera de 2008 y 2009, el mercado de acciones se ha recuperado y ahora estamos en lo que los expertos llaman un mercado en auge (“bull market”), un mercado en el que los precios de las acciones de las empresas están aumentando y los inversionistas están interesados en comprar las acciones.

El desempeño del mercado de acciones ha sido sobresaliente. Desde el punto más bajo del mercado en marzo de 2009 hasta febrero de 2013, el precio de las acciones aumentó 89% con base en el S&P 500, el índice de acciones  compuesto por las principales 500 empresas de Estados Unidos. Esto representa un impresionante rendimiento promedio anual de 17% en os últimos 4 años.

Este rendimiento supera de lejos a otras alternativas de inversión como bonos, fondos de mercado de dinero, certificados de depósito o inversiones inmobiliarias. Sin embargo, se asume más riesgo cuando se invierte en el mercado de acciones. Esto indica que la rentabilidad cambia mucho de un mes a otro e incluso entre un día y otro.

Pero el mercado de acciones es una buena alternativa para lograr metas de largo plazo como el retiro cuando el riesgo se administra adecuadamente de acuerdo a la edad y las metas del inversionista.

Su devolución de impuestos puede ser su entrada al mundo de las inversiones:

-Tan pronto como reciba su devolución de impuestos este año abra una cuenta de inversión en una firma de corretaje o en su propio banco. Abra una cuenta de retiro individual (IRA). El IRA es un vehículo en el que usted invierte su dinero y obtiene una ventaja de impuestos: Cada dólar que invierta en la cuenta IRA reduce su ingreso gravable y así paga menos impuestos mientras invierte sus ahorros.

-Cuando tenga una cuenta IRA, usted puede seleccionar fondos mutuos para invertir su dinero. El fondo mutuo invierte su dinero en acciones, bonos o alternativas de efectivo. El fondo mutuo administra el dinero de muchos inversionistas (cientos o miles). Esto permite que el dinero del pequeño inversionista sea gestionado por profesionales.

-Usted puede seleccionar entre miles de fondos diferentes con objetivos diversos. Hay fondos para acciones, para bonos, o fondos que invierten en una mezcla de acciones y bonos.

-Su selección del fondo depende el riesgo que esté dispuesto a asumir con su dinero. Por ejemplo, las acciones tienen más riesgo que los bonos. Sin embargo, a largo plazo el rendimiento de las acciones tiende a ser mayor. Y usted necesitará rendimientos más altos para lograr metas de largo plazo como la jubilación.

-¿Cuánto riesgo puede tomar? Todo depende del tiempo que tenga para alcanzar el logro. Si a usted le faltan 20 años para jubilarse, usted puede asumir mucho más riesgo que si planea retirarse el próximo año.

-La devolución de impuestos es sólo el punto de arranque. Una vez usted abre una cuenta IRA usted puede registrarse para realizar inversiones automáticas para aportar cada mes a su cuenta IRA.

-Sus finanzas se van a transformar porque usted empezará a ser un inversionista con metas de largo plazo.

-¿No ha presentado sus impuestos todavía? Puede ir a Internet y presentar sus impuestos para obtener su devolución de impuestos lo más rápido posible, empezar a invertir y hacer que su dinero rinda más.

Who can I claim as a dependent?

Your significant other is probably many things to you—but is he or she also a tax deduction? The question of who you can claim as a dependent has confused taxpayers for years.

The short answer: You can claim a “qualifying child” or “qualifying relative” if they meet specific requirements related to residence, relationship to you, age, financial support provided and income. And yes, you may be able to claim a girlfriend, boyfriend, domestic partner or friend as a qualifying relative in some cases. Claiming dependents can give you a tax deduction worth up to $3,800 per dependent and also make you eligible for many other tax deductions like the Earned Income Tax Credit.

What is the Earned Income Tax Credit and How Do I Claim it?

The Earned Income Tax Credit is a tax credit for low to middle income wage earners that has lifted nearly 7 million people out of poverty, however many people still miss it. Why do so many people miss it? Many think they don’t make enough to file their taxes so they don’t claim it. You have to file your taxes to get this valuable tax credit, which may help a family with three dependents receive a credit worth up to $5,891.

Does healthcare reform impact my 2012 taxes?

There’s been a lot of confusion about healthcare reform and taxes. Rest assured, the requirement to purchase healthcare does not impact your 2012 or 2013 taxes. You do not have to purchase health insurance until January 2014 and there may be a few exceptions based on income, religious beliefs, and citizenship. You will not see changes to your taxes related to the purchase of health insurance until your 2014 taxes are filed in 2015 if you buy healthcare coverage at a health insurance exchange.

Are unemployment benefits taxable?

The unemployment rate has dipped to 7.9 percent vs. 8.3 percent in January 2013. But that’s little comfort to the jobless who find out their unemployment income is taxable income. The good news is that job search and moving expenses may be tax-deductible. See the next question for more details.

Can I deduct the cost of searching for a job? Are moving expenses for my new job tax deductible?

Job seekers may be able to deduct many expenses related to their search: printing resumes, fees for employment and outplacement agencies, career seminar costs and business-related travel. Moving expenses relevant to your job search may be deductible if you meet the distance and time test.

What are the tax implications of withdrawing money early from a retirement account to pay bills or debt?

In difficult economic times, many people start eyeing their retirement accounts to pay off bills or debt. While it is your money, you may be unaware of the impacts of withdrawing from your nest egg. Withdrawing money early from a retirement account comes with a 10 percent tax penalty in addition to the regular income tax on the amount withdrawn. There can be other consequences, too. The retirement money may bump you into a higher tax bracket, which can result in the taxation of other income, such as social security, that you wouldn’t have been taxed on otherwise.

What are qualified education expenses? And when can I file?

College tuition skyrockets every year, but the U.S. government provides incentives with education credits and deductions. For example, the American Opportunity Credit, which was extended through 2012, benefits full-time and part-time college students with a maximum $2,500 credit per student, provided you meet modified adjusted gross income requirements.

My house foreclosed, how does that impact my taxes?

The Mortgage Forgiveness Debt Relief Act survived the recent ‘fiscal cliff,’ receiving a one-year extension through 2013. This means you don’t have to pay taxes on the loss of your home through foreclosure or short sale, up to $2 million (or $1 million if married filing separately).

I started my own business; can I deduct my home office expenses?

Many entrepreneurs are reluctant to write off the business use of their home for fear of being audited. But home office expenses are a legitimate tax deduction you shouldn’t miss out on. Keep in mind the space you claim as a home office should be used exclusively and regularly for that purpose.

Will January tax law changes impact my taxes?

On Jan. 1, 2013, Congress kept the U.S. from going over the ‘fiscal cliff’ by passing The American Tax Relief Act of 2012. The act includes a permanent extension of the Alternative Minimum Tax (AMT) patch, the permanent reduction of tax rates and the reinstatement of several tax deductions, including the Educator Expense Deduction, the Tuition and Fees Deduction, and state sales taxes in lieu of state income taxes.

I was impacted by a natural disaster in 2012. What tax breaks are available to me?

Hurricane Sandy and other natural disasters last year left many picking up the pieces, filing insurance claims, and wondering how it will affect their taxes. It’s possible to take a tax deduction for property loss claims not compensated by insurance, or in some special cases, when you’re still waiting for compensation. These are known as casualty losses and include hurricanes, floods, earthquakes, tornadoes, fire—even vandalism and shipwrecks.

What if I still have questions?

TurboTax is here for you. Only TurboTax let’s you talk to tax experts who are CPAs, IRS enrolled agents, and tax attorneys while you prepare your taxes, free.

There are many determining factors that enter into the equation when making the decision about filing a tax return. Such items as filing status, income level, age, and whether or not someone claims you as a dependent play an important role in filing taxes.

Minimums to File

A good rule of thumb to follow when approaching the task of filing taxes is this: When in doubt, go ahead and file.

An important fact to know is that dependents are not always exempt from filing income tax returns. If you happen to be under 65 years old and another person is claiming you as a dependent on their individual tax return, you must also file your own tax return if you have $950 in unearned income or $5,950 of earned income.  Unearned income includes taxable interest and dividends. Earned income includes wages, tips, self-employment, taxable scholarship and fellowship grants.

Special Circumstances

The situations that follow require you to submit a tax return no matter what your income happens to be.

• If you are receiving distributions from a Health Savings Account or a Medical Savings Account.
• If you owe Social Security and Medicare taxes on unreported income from tips.
• Alternative Minimum Tax – if this tax is owed, you must submit a return.
• Retirement Plan and Health Savings Account – if you owe additional taxes on either of these accounts, you must file a return.
• Self-Employment – you have to file if you have earned more than $400 (net).

Not Required, But You Should File to Get a Refund

Yes, there are people who do not meet the minimum requirements, but still find a reason to file. Sound odd? Take a look at some of the circumstances that might give you the rationale to file your tax return…despite not being required to do so.

• If federal taxes were taken out of your paycheck, you can only get a tax refund if you file an income tax return.
• If you happen to qualify for the Earned Income Tax Credit, you must file a return to get your refund.
• You must file a return to receive the Additional Child Tax Credit, if you have children (obviously).
• If you adopted a child in the previous year, you need to file a return to receive the Adoption Tax Credit.

Remember, when in doubt, go ahead and file a tax return. Turbo Tax offers a Federal Free Edition of their tax software. It won’t cost you a thing to get started, and the software will help you easily prepare your taxes and help you keep more of your hard-earned money.  Have questions?  Only TurboTax lets you speak to CPAs, IRS enrolled agents, and tax attorneys while you prepare your tax return, free.

Setting aside a small amount of money in a safe place allows people to manage unexpected events, opens up opportunities for education and helps families build future financial security.

Tax time is the ideal time to think about saving. Lower-income families, especially those eligible for tax credits, can receive tax refunds that amount to as much as 20% of their annual incomes.  For many, tax time is the only time all year that they can save money.

“Buying a U.S. Savings Bond with your tax refund is an easy way to start saving”, said Bernie McKay, director of The American Tax & Financial Center at TurboTax. “You only need $50 to get started and you’ll earn interest so your money starts growing immediately. Tax time is the perfect time to get your financial house in order and  jumpstart saving for the future for you and the people you care about.”

Why Series I Bonds?

U.S. Savings Bonds are a simple and versatile savings opportunity for average American working families.

Sold in denominations of as little as $50, Series I bonds, the type available for purchase through TurboTax, are available to every taxpayer who receives at least $50 in tax refunds. Taxpayers can use a portion of their tax refund to buy bonds and have the remainder deposited into a bank account or pre-paid debit card.

Savings bonds can be purchased as gifts for others, and many purchasers save for their children’s education.

SaveYourRefund Sweepstakes

The SaveYourRefund Sweepstakes makes taxpayers a winner this tax season with chances to win $250 in weekly drawings or a grand prize of $25,000 by saving just $50 of their federal refund! Beginning February 1, 2013 and running through April 15th, 2013, all U.S. Citizens and legal residents over age 18 that are due a federal tax refund can save a portion of that refund using IRS Form 8888 and enter the sweepstakes.

The Sweepstakes, offered through Doorway2Dreams, a non-profit organization committed to improving the financial lives of Americans. will award multiple weekly prizes of $250 and all entrants will be eligible for a chance at winning the $25,000 Grand Prize. Visit http://www.SaveYourRefund.com to submit your entry.

Everyone at TurboTax is proud to help our customers and their families save for their futures. In fact, TurboTax has been a significant contributor to tax-time savings. Over the past three years, more than 75,000 tax filers have purchased U.S. Savings Bonds and accumulated more than $40 million for themselves and their loved ones.

1. E-file your tax return – Congratulations on finishing taxes, the hard part is over! Now you just have to sit tight and count the days until you receive your refund.
2. Check the status of your e-filed return – Approximately 24-48 hours after you have e-filed your tax return, you will receive an email from the IRS letting you know that your tax return has been accepted!  If your return was not accepted, visit this FAQ.  If for some reason you do not receive an email, you can check the status of your e-filed return here.
3. Start tracking your refund –  About 24-48 hours after the IRS accepts your tax return, you can start tracking your refund. The IRS expects to issue more than 9 out of 10 refunds in less than 21 days upon acceptance.  You can track your refund at the IRS Where’s My Refund tool or by logging into your MyTurboTax account.
4. Your tax refund is here – If you chose direct deposit when you filed your return, you’ll need to allow 1-2 business days for your bank or financial institution to process it and have it available for you once the IRS has released it. If you didn’t choose direct deposit, the IRS will mail you your tax refund check, which could take 6-8 weeks.

Of course times may vary based on your situation.  Click here to see a list of tax forms that the IRS is not accepting yet.

Are you expecting a tax refund this year? If you are eligible for the Earned Income Tax Credit, one might be coming your way. Though the refunds are greater if you have children, even those without children can qualify, as long as you or your spouse (if married filing jointly) are between the ages of 25 and 65.

The problem for most people trying to claim the credit is that the rules seem complicated, but using TurboTax makes it simple. In addition to TurboTax software making it easy to claim the credit,  Intuit, maker of TurboTax also has the EITC Finder, which is a free smartphone app that makes determining eligibility easy.

Here are the rules for claiming the tax credit:

Your wages and self-employment earnings are the basis for the credit. You also can have interest, dividends and other investment earnings, but not more than $3,200 in 2012. For most of us, with interest rates at rock bottom, that isn’t a problem.

How much you can earn and qualify for the tax credit may depend on how many dependent children you have.

For 2012 if you have:

• Three or more children, you can earn up to $45,060 and qualify
• Two children, that drops to $41,952
• Only one child, your earnings and adjusted gross income can’t top $36,920
• No children? No problem, as long as your income is less than $13,980.

The refundable tax credit can give you tax credits ranging from a maximum of $5,891 if you have three children, to $475 if you have no children.

Here’s the best part: Most tax credits only apply against taxes you owe. If your tax is zero, you get no benefit. But if the earned income credit is greater than the tax you owe, the IRS will send you the difference. For example, if your credit is $1,200 and you owe $800 in taxes, you’ll get a check from the IRS for $400. How sweet is that?

Now for the fine print: If you are married but file separate returns as “married filing separately” you don’t qualify for the earned income credit. And if you share custody and your child has lived in your household for more than half the year, that child can qualify you for the credit even if the other parent is entitled to claim the exemption for the child on their tax return.

If you are eligible for the federal tax credit and you live in one of the 25 states that also has the credit, your benefits may be multiplied. And even if you normally make too much to qualify for the credit, if you lost your job and were out of work in 2012, you may still qualify for that year.

Remember if you have any questions about this tax law, you can call and ask our CPAs, tax attorneys, or IRS enrolled agents your question for free.

Tax Deadline

When is Your Extended Tax Return Due?

Your timely filed extension changes your deadline to file from April 17 to October 15.  Of course, this six month delay assumes you paid any tax you owed back in April. As the saying goes, an extension of time to file is not an extension of time to pay your tax.

How Do You File a Tax Return You Previously Extended?

To file an extended tax return, simply gather and enter the information from your W-2s, 1099s, and tax documents.  TurboTax will ask you the necessary questions to enter the appropriate information from your documents and help you complete your tax return.

What Should I Do If I Didn’t File a Tax Extension?

If you missed the tax filing deadline and the deadline to file an extension in April, you should still file your tax return as soon as possible.  You may be missing out on your big tax refund and if you owe money you will continue to incur penalties and interest until you file your tax return.

Need More Time?

Years ago, filing an extension provided the filer with four additional months to file his or her return, until August 15.  Back then, you could apply for an additional two-month extension if you needed it.  While that second extension wasn’t technically automatic, it was nearly so.  These days you automatically get the additional six months from the get-go.  On the other hand, that means no additional extensions are available so make sure you file your tax return by October 15.

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.

Saving Tips

After you file your tax return, it’s a good time to step back and consider your options. Your tax filing provides you with an opportunity to reflect on your financial situation, and decide what moves you can make going forward.

First Things First: Consider Adjusting Your Withholding

Once your taxes are filed, and you know how much money you owe, or how much money the government owes you, it’s the perfect time to evaluate your income tax withholding. If you have a huge refund, you might consider reducing your withholding by filling out a new Form W4. That way, you have more money each month to use to your advantage, rather than simply giving an interest-free loan to the government. While it might be nice to get a fat refund check, the reality is that you are simply giving your money away to the government. Forced savings is better than no savings, but discipline will trump all that.

If you underpaid by quite a bit, you might consider increasing your withholding so you don’t owe as much next year. While it’s not terrible to owe at tax time, if you owe too much, the IRS will assess penalties and take even more of your hard earned cash. Planning to owe is a fine line to walk, and it’s one to consider carefully. If you are self-employed, and you owe quite a bit, increase what you pay each quarter so that you don’t as much next year.

Smart Moves for Your Tax Refund

If you are receiving a tax refund, you need to figure out what you will do with the money. Some of the smartest things you can do with your tax refund include:

1. Pay down high-interest debt – If you have high interest debt, such as credit card debt, you should make it a priority to pay some of it down with your tax refund. High interest debt is like an anchor on your finances, help yourself out by paying it down as much as you can afford.
2. Increase your retirement account contributions – Saving for retirement should be second on your list, behind paying down debt. Make a contribution to your Roth IRA or IRA, increase your contributions to 401(k), or simply put a little extra away in a savings account. You won’t see the benefits of these savings for many years but the earlier you start, the better.
3. Contribution to a Health Savings Account – An HSA, if you are eligible, is a great way to save for your future medical costs. While it’s not a priority, like the first two are priorities, it is smart and something to consider if you are eligible.
4. Use some of the money to start a passive income stream/invest – If you’re fortunate enough to have avoided debt, juiced up your retirement accounts, start looking at ways to invest those funds to create an income stream for the future.
5. Make home improvements that can add to the value of your home – This one falls into the category of treating yourself while doing something financially smart. If there have been some home improvements you’ve had your eye on, like redoing your kitchen or bathroom, take some of the cash to do the job. It’ll improve your enjoyment of your home plus increase it’s value.
6. Take a vacation – Finally, try to enjoy some of it. If you’re responsible enough to pay down some debt, increase retirement savings, and do all of the other responsible things on this list, take some of the cash and enjoy it. Take a vacation, buy something you’ve had your eye on, and live life. Think of it as an investment in yourself. You know what they say about all work and no play!

Consider How to Pay What You Owe

Many people find that they are unable to pay their taxes. Once you file, it’s important to figure out how you discharge your obligation. The good news is that the IRS and most state governments offer payment plans. This can make it more affordable for you to pay what you owe. If you find yourself overwhelmed, the smart play is to set up an installment plan. You’ll pay interest, but it’s usually a better option than being charged fees due to late payments or paying high interest by putting it on a credit card or taking a payday loan.

Prepare for Next Year

Once you are squared away with this year’s taxes, the smart move is to prepare for next year. Plan ahead for specific spending that can result in a deduction, or a tax credit. You should also consider organizing your finances so that you are keeping track of your tax-related receipts throughout the year. This will help you minimize your tax liability and help you avoid the last-minute rush each year.

Interactive by Column Five

How much did you spend on your last date?

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What are your travel plans this year?

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