Last Minute (Legitimate) Tax Hacks

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As Tax Day 2014 creeps closer and closer, there are still many people who have not filed their tax returns. As a matter of fact, plenty of people wait as long as humanly possible to either e-file or “snail mail” the necessary paperwork every year. Whether it’s due to fear, being too busy or procrastination, if you are one of the “later filers” – we’ve got some tips that you can still take advantage of this year.

And, while less than 1% of tax returns end up being audited, it’s always best to do everything possible to avoid being selected for “further review.” So, even if your filing right at the deadline (or if you’re thinking of requesting an extension), take our word for it when we say that these are definitely things to pay close attention to:

Get the most out of your health savings accounts – In 2013, individuals with high deductible insurance plans were able to contribute up to $3250 of tax-deferred money into their account (individual). In addition, they were able to contribute up to $6450 (family plan). Healthcare savings contributions have a deadline of April 15, 2014.

Be on the lookout for illegitimate tax preparers – The best way to have the most control over your tax return is by preparing it yourself. This is a good idea for individuals who make less than $52,000 a year and don’t have a lot of deductions. However, if you are planning to hire a tax preparer, choose carefully. Plenty of tax preparers make false claims and in order to come through on those false claims, they may indeed falsify your taxes. Steer clear of anyone who states that they can obtain a larger refund than anyone else. It’s also a good idea to walk away if a preparer charges you a percentage of your tax refund. Always do a little snooping about the preparer’s credentials – asking your friends for a referral to someone they trust is a good way to ensure that you’ll be working with someone above board.

If you are married, file jointly – Filing together with your spouse is a great way to take advantage of tax savings such as more exemptions, dependents, IRA contributions, child tax credits, earned income tax credits, and itemizing deductions. Additionally, any health insurance policy that you have purchased for your spouse through your place of employment gives you tax-deductible premiums. What’s really cool is that if you were already legally married in the years 2010 through 2012, you can actually go back and make amendments to those tax returns based on new tax laws that have come into play since then.

Get your deductions in a row

  • In the age of entrepreneurship, freelancing and working from home, deducting your home office just became a whole lot simpler! If you qualify, you can deduct $5 per square foot of the size of your home office, with a maximum of 300 square feet.
  • If you itemize: you’ll have the choice to either deduct your state and local income taxes OR the total amount of state and local income taxes that you paid the previous year.
  • Did you switch jobs last year? If your new job required you to relocate, you may be able to deduct your costs of moving for the job. This includes: the cost of driving your car to your new location, parking fees, tolls, the cost to fly to your new location, and temporary lodging costs during travel.

If you have a lot of questions about the complexity of federal tax codes and how they relate to you, be aware that you do have options regarding who you pay to help you! You want to pay for advice and knowledge rather than a typist. A storefront tax agent will get the job done, but a certified CPA or accountant has more knowledge and will be available to answer your questions at any time throughout the year. You can also have a tax attorney help you file your taxes. Naturally, the more experienced professionals (CPAs and attorneys) are going to be more expensive, but it may very well pay off because of their sweeping knowledge of constantly changing tax trends and tax laws. Oh, and if you itemize, you may be able to deduct any fee that you pay someone to prepare your taxes on next year’s tax return.

Need help deciding who to hire? Send us a message at Veitengruber Law and we’ll put you in touch with a respected and trusted member of our network!

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One Response to Last Minute (Legitimate) Tax Hacks

  1. Pingback: Can I Keep My Tax Refund if I File for Chapter 13 Bankruptcy? | Veitengruber Law

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