Statistically speaking, about half of marriages in the US end in divorce. This means that it's a reality that many people face. You have to deal with a lot during a divorce, not to mention more complicated paperwork during tax time. Read these tips from Kathy Pickering, executive director of The Tax Institute at H&R Block, to make sure you're on top of things as April 15 approaches.
It sounds great to work from home, but that also means you'll have more taxes to do! Freelancers don't have their tax taken out of their pay automatically like salaried employees do, which just makes doing taxes a little more complicated. To make sure you're on the right track, Kathy Pickering, the executive director of The Tax Institute at H&R Block, shares some tax tips every freelancer should know.
If you're dragging your feet on doing your taxes, it's time to get started on them now. After all, April 15 is just around the corner. Why put off the inevitable? Here are a couple of tips to help you get started.
Fill out the simple details. Take a deep breath and just start. Filling out details like your name and address isn't so hard, right? Take one step at a time and work on it across several nights after work or on the weekend. Slowly, but surely, you'll make your way to the end. Trying to tackle everything in one go may overwhelm you, so it's better to take it slow.
Find a buddy. Find a tax buddy and resolve to do taxes together on a designated day. Make a date out of it and do it at home while watching old episodes of The Office or schedule to meet up and bring your laptops to a hip neighborhood café.
Announce it. Announce your intentions to work on your taxes to the world . . . OK, well, maybe just Facebook and Twitter. Seeing all the "likes" and comments roll in will definitely motivate you to do them. And the cherry on top? Telling everyone that you're done with taxes and just waiting for your juicy refund to come.
Reward yourself. Promise to reward yourself with a small treat when you're done. Perhaps it's a blueberry yogurt or a relaxing massage. Create positive incentives to give you the extra push you need to complete your taxes.
Going green can save you some green during tax time. If you are attempting to improve the environment or just cut the cost of your personal energy use, then the tax law may provide a tax benefit for your good citizenship. Kathy Pickering, executive director of The Tax Institute at H&R Block, shares some potential benefits for energy-savers. There are many tax changes that have been implemented, so read on to find out what credits you're still eligible for:
If you're pretending to nod along when your pal's complaining about her taxes, perhaps you need to read this quick cheat sheet by LearnVest that addresses everything you've been wondering about filing.
Exemptions, filing status, and freelance taxes — if any of these have you scratching your head, we can help. We talked to LearnVest Planning Services certified financial planner Samantha Vient for answers to all your (really, not that embarrassing) questions.
1. Are there any benefits to filing early? And what happens if I file after the deadline?
The main benefit of filing before April is getting your tax refund back sooner. But filing really close to the deadline could also cost you money. "If you're working with a CPA and you dump your tax stuff on them two weeks before April 15," Vient says, "most people will charge you a premium." And doing your taxes earlier will mean that if you hit a snag like a missing form or needing to resolve a big question, you have more time to solve it.
Tax day is approaching, and if you haven't yet filed, you might want to brush up on tax credits you're allotted, especially if you're a mom. After all, taking care of children is a full-time job that may leave barely enough time for the practical obligations such as taxes. Don't sweat; Lisa Greene-Lewis, lead CPA at the American Tax & Financial Center at TurboTax, is here to save you minutes in your day. Here are some tax deductions and credits that are easily overlooked by parents.
"In 2012, you can claim a tax deduction of $3,800 for each dependent child, relative, and maybe even a friend that you supported the entire year. For 2013, the deduction increases to $3,900. These exemptions reduce the portion of your income that is subject to federal tax. If you are in the 15 percent bracket, this will save you $570 per dependent for 2012, and at 25 percent, $950 in 2012. The higher your tax bracket, the more each dependency exemption saves you."
Child Tax Credit
"You may also be eligible for a tax credit, which is even better than a deduction, since it reduces your taxes dollar for dollar. The Child Tax Credit is an additional $1,000 credit you may be able to claim for children under 17. For married couples with income over $110,000 or $75,000 for a single parent, the credit phases out."
Tax Day, which is on April 15 this year, is looming closer, and for those of you who haven't filed, make sure you're not making careless mistakes when rushing to meet the deadline. Here are a couple of common errors taxpayers make when filing, according to the IRS:
- Social Security numbers. Many people input incorrect or missing Social Security numbers, so make sure you're entering in the same numbers that are on your Social Security card.
- Dependent's last name. You'd be surprised to know that many people misspell their dependent's last name. Make sure you use the same name that's used on their Social Security card.
- Filing status. Many people choose the wrong filing status. Be familiar with the five filing statuses, which are single, married filing jointly, married filing separately, head of household, and qualifying widower with dependent child. To figure out which status is the most suitable for your situation, read Publication 501.
It seems like no matter how far back you go in history, there have always been taxes when there was some sort of currency and governing body involved. The further back you go, the more interesting the taxes get. Some of the more unique taxes can be found in one of the most romantic periods of all time — the Regency era in Great Britain from 1811-1820. Here are the taxes to expect if you were living in Jane Austen's time, according to Regency researcher Nancy Mayer:
- Servants: You got taxed two pounds, eight shillings every year for every male servant you had. The more servants you had, the higher the tax.
- Window tax: This was a crafty way to tax the rich since bigger houses tend to have more windows. The tax increased the more windows there were in a home. To avoid the window tax, some sneaky homeowners bricked up their windows.
- Hair powder: People who wore hair powder had to pay a tax of about one pound a year.
- Dogs: Owning a dog would result in a tax, and the more dogs you have, the more you'd get taxed.
- Carriages: You had to pay 12 pounds a year for a four-wheeled carriage for pleasure. The more servants you had, the higher the tax. If you had two of these carriages, you got taxed 26 pounds, and if you had three, you'd be taxed 42 pounds.
If you think one pound a year is a small amount, keep in mind that the average farmer in that era made about 15 to 20 pounds a year.
It's hard to escape the glow of purchasing your new home and wake up to the not-so-fun paperwork of being a homeowner. For one, you'll have more taxes to file, but on the plus side, that also means more tax benefits and credits for you! Kathy Pickering, the executive director of The Tax Institute at H&R Block shares what kind of tax goodies you qualify for as a new homeowner. Read on to find out what they are.
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.