2012 Taxes

The deadline for filing your 2012 tax return is fast approaching, and if you've been procrastinating, perhaps you might need to file an extension if you can't file all your paperwork by April 15.

Keep in mind that tax extensions only buy you time for filing your return, but they don't let you postpone the payment of taxes owed. So if you are filing for an extension but need to pay taxes, you need to have it paid by April 15 to avoid penalties.

Filing an extension will give you an extra six months to complete and file your tax return. And it's simple — all you need to do to extend the deadline to Oct. 15 is to file the paper form of Form 4868 or through the online e-file system.

If you were particularly giving in 2012, then you can look forward to a smaller bill come tax time. Read these tips from Kathy Pickering, executive director of The Tax Institute at H&R Block:

Itemizing Deductions: To deduct a charitable contribution, you must file Form 1040 and itemize deductions on Schedule A.

Note the Date of the Donation: To be able to deduct contributions on your 2012 return, you must have completed the donation by Dec. 31, 2012. A bank record or receipt is needed for all cash donations of less than $250; cash donations of $250 or more require written confirmation from the charitable organization. Additional substantiation requirements apply to cash donations of over $500 and to all noncash donations.

In general, the deduction for donations of stock or other noncash property is usually the fair-market value of the property. Clothing and household items must generally be in good condition to be deductible. Special rules apply to the donation of vehicles.

Qualified Nonprofit: To qualify for a tax deduction, you must be giving to a qualified tax-exempt charitable organization. You cannot deduct contributions made to specific individuals, political organizations, or candidates.

Deduct Benefits: If you receive a benefit in return such as tickets to a game or merchandise, then you can deduct only the amount of the donation that exceeds the fair-market value of the benefit received. Written acknowledgements should state the value of any goods or services received for your donation.

Now that tax day is over, it's time to think about your next move — what to do with your refund. Many of you may become a few thousand dollars richer, because the average tax refund this year is about $3,000, according to IRS agency chief Douglas H. Shulman. Although I've been seeing a few Facebook statuses about using the money to buy a new pair of shoes or bags, there are more financially savvy ways to spend your tax windfall. Here are some financially responsible things to do with the extra cash:

• Pay off high-interest debt. Make a dent in your debt by using your refund check to pay it off. Lowering the amount you owe, whether it be credit card debt or car loans, means reducing the interest you'll be paying. Paying less interest will equate to more savings down the road. Be smart when choosing to pay off debt and keep in mind that paying down debt might result in a lower credit limit.
• Emergency fund. If you're living paycheck to paycheck, this might be a good time to save some money for a rainy day. Anything can happen these days — you may have to pay for unexpected fixes on your car or you might even lose your job (knock on wood) — so you really need to have some extra financial padding to get you through the tough times. If you have a lot of high-interest debt to pay off, you may want to use most of your refund to pay off the debt, then squirrel away a portion of it toward your emergency fund. It's good to have at least six months to a year of emergency savings.
• Green your home. Make your home more eco-friendly by purchasing Energy Star appliances that will save you money on utilities. Figure out if your home can improve on insulation by using your refund to pay for a paid inspection by a professional energy auditor. Save energy and money by figuring out what works best for your house, from installing windows and doors that fit better to plugging and caulking cracks and holes.

Read on for more.

It's that time of the year again — tax day. Many may describe it as a painful necessity, but on the bright side, there are plenty of retailers that are ready and willing to help soothe your tax frustrations.

• Arby’s: Get free curly fries at participating Arby's restaurants on April 17. "Like" its Facebook page to get the coupon.
• Boston Market: Buy a meal and get one free on April 17 with this coupon.
• Bruegger's: "Like" Bruegger's Facebook page, and you'll have access to a coupon that'll get you a dozen bagels and two tubs of cream cheese for $10.40.
• Cinnabon: Get two free Cinnabon Bites from 6 p.m. to 8 p.m. on April 17, while stocks last at participating outlets.
• Chili's: Get a free appetizer or dessert when you buy an entrée by using this coupon. Offer lasts until April 18.
• Hooters: Get 20 boneless wings for $9.99
• HydroMassage: Make an appointment for your free HydroMassage outlet using this coupon. Offer ends April 20.
• Maggie Moo's and Marble Slab Creamery: From 4 p.m. to 7 p.m. on April 17, get a free scoop of frozen yogurt while stocks last at participating branches. You have to "like" Maggie Moo's on Facebook to access their coupon. Similarly, you have to "like" Marble Slab Creamery on Facebook to get the coupons for their store.
• McCormick & Schmick's On April 17, happy hour will be from 3.30 p.m. to 11 p.m. Look out for special tax day drinks!
• P.F. Chang's: Get 15 percent off food orders.
• Panda Express: Claim a coupon on its Facebook page to enjoy a free serving of Shanghai Steak on April 17.
• Seattle's Best: Free coffee on April 17 at participating shops. You can also get a free sample of Seattle’s Best coffee if you "like" it on Facebook.
• Sonic: Drinks and slushes for 50 percent off at participating restaurants on April 17.
• White Castle: Buy a sandwich and get one free chicken breast sandwich using this coupon. Offer ends April 28.

As we informed you not so long ago, this year's tax day will now be on April 17 instead of the traditional date of April 15. Two days later doesn't mean more time to procrastinate, but for those of you who dragged your feet, read these savvy tax tips and posts to get you going!

How to Request a Tax Extension	Don't Make These 10 Tax Mistakes When Rushing to File	7 Meaningful Ways to Spend Your Tax Refund
Tax Tips For Freelancers	4 Last-Minute Tax Tips	Don’t Forget These 5 Tax Breaks

For more savvy tax tips, read on.

And the countdown begins . . . four days until Tax Day, which is on April 17 this year. Seems like most of you have already filed, but for those of you who haven't, Kathy Pickering, executive director of The Tax Institute at H&R Block, names some of the most common tax mistakes that people make. Here they are:

• Failure to take into account new tax laws.
• Recording an incorrect filing status, such as Head of Household, when it should be Married Filing Separately or Single.
• Social security numbers are incorrect, missing, or don’t match the names on the return.
• Filing with incorrect or missing forms, schedules, and supporting documentation for your return.
• Forgetting to sign a paper-filed return.
• Claiming ineligible dependents.
• Missing valuable tax credits and deductions.
• Math errors.
• Not allowing enough time to prepare the tax return, and rushing through the preparation process.
• Recording incorrect financial institution routing and account numbers for a direct deposit of your refund.

Bankrate has a nice roundup of how the new tax laws will affect your 2011 tax returns, so be sure to check it out. To prevent most of these common tax mistakes, the IRS recommends to file your tax returns online, which you can easily do through Turbo Tax or IRS Free File. You should also double check all your figures to make sure that you're not doing the math wrong and that you're not inputting the wrong information.

If you're really rushing through your taxes, perhaps filing at the last moment might not be a good idea because you'll be more prone to making errors. You can opt to file an extension — our friends at H&R block say they are offering free extension filing from now until April 18, so you might want to take advantage of this freebie! Keep in mind that the extension applies to just the return and you can't delay your payment.

Tax Day is nearing and when you're rushing to file, don't forget these tax breaks cited by Kiplinger for a bigger tax refund.

With the tax-filing deadline coming up very soon, I'm still getting a lot of questions from people about potential tax breaks. Before you file, see if you’re eligible for the following deductions and tax credits.

Tax breaks for college costs. The American Opportunity tax credit can lower your tax bill by up to $2,500 if you spend at least $4,000 in tuition, required fees, books and course materials for the year. It applies to the first four years of postsecondary education. To qualify, your modified adjusted gross income must be less than $160,000 if you are married filing jointly, or $80,000 if you are single (the credit phases out completely at $180,000 for married couples, or $90,000 for single filers). The Lifetime Learning Credit applies to all years of postsecondary education (including graduate school) and can lower your tax bill by up to $2,000 per return. To qualify for the full credit, your modified adjusted gross income must be less than $100,000 if you are married filing jointly or $50,000 if you are single. The size of the credit phases out until your income reaches $120,000 if you are married filing jointly or $60,000 if single. See Tax Breaks and Credits For College Costs for more information.

Extra credit for saving. If you contributed to a traditional or Roth IRA, a 401(k) or another retirement savings plan, you may qualify for the retirement savers' tax credit, which can reduce your tax bill by up to $1,000 per person. To claim the savers' credit for 2011, your adjusted gross income must be $28,250 or less if you're single; $42,375 or less if you file your tax return as head of household; or $56,500 or less if you are married filing jointly. See A Tax Credit For Retirement Savers for more information.

Read on for more.