Stretching Your Dollar: Tax Savings

1 year 9 months 4 weeks ago Tuesday, April 19 2016 Apr 19, 2016 Tuesday, April 19, 2016 10:56:41 AM CDT April 19, 2016 in News

COLUMBIA - If one of the almost 70 percent of Americans who are getting a tax refund, you've probably already filed your 2015 taxes because you want your money.

But for those who love a deadline, you had a couple of extra days thanks to Abraham Lincoln, his Emancipation Proclamation and the government holiday it created.

In the grand scheme of things, a couple of extra days really don't make a difference with taxes. But changes made over months? Those can add up.

Here are some of the easiest ways to reduce what you pay, or increase your refund this time next year.
 
Add money to an individual retirement account. Or if you don't have one. Start one.

Money put in an IRA reduces your total taxable income, so the IRS is looking at a smaller number when its figuring out what percentage to take from you in taxes.


You can put money in an IRA all the way up to April 15 of the new calendar year (or 18th this year). meaning for those filing today, they could still move money to their IRA and reduce their taxes for the past year.
 
There's also the Dependent Care Tax Credit.


If you're paying for child or elder care expenses while you're working, you can claim this tax credit regardless of your income.


That means daycare, after-school care and even day camps during the summer for children 12 and younger can be written off.


In fact, anyone, regardless of age, who lives with you at least half of the year and requires care during your time at work would likely qualify for this tax credit.


The maximum amount you can claim for one dependent is $3,000 or $6,000 for two or more dependents.

Also consider being more charitable if you want to pay less on tax day.


The IRS agrees to reduce your taxable income if you give to a nonprofit organization. That is those with 501(c3) Status.


You can deduct up to 50% of your adjusted income. That reduces your overall taxable income by 20% and 30% by giving to non-profits.


But you'll need proof in the form of a receipt and you can't get anything in return for your contribution.
 
Do you have a home offices?


With more people choosing to work from home, this deduction has become much more attractive.


In addition to the typical deductions, such as for office supplies, you might also be able to claim a part of your homeowner's insurance, repair costs and even home depreciation.


But save everything. Never let a single receipt go into the trash can.


In fact, request receipts for things you might not have considered before, like parking meters or a toll booth fee on the way to the convention. Having a strong paper trail will help you figure out exactly what you can deduct, and are required if you're audited.
 

Here are some helpful links.

H&R Block Tax Prep Checklist

Staples' list of what you might be able to claim if you have a home office.

The list of what you might be able to claim if you have a home office is impressive. Staples has compiled a list to get you started.

File Form 4868 for a extension.

An IRS explanation of filing for an extension.

 

 

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