Last Minute Tax Filing Tips for 2011

Taxes
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This is a guest post from Catherine Hawley, SaveUp’s contributing writer and Certified Financial Planner™.  SaveUp is a free program that rewards Americans for saving and paying down their debts. 

With tax deadlines fast approaching, it’s still not too late to file effectively! I want to offer a few suggestions for last-minute filing as well as tips for filing next year so you are ahead of the game.

Here is what you can do today:

  1. Organize your documents to make the time with your tax advisor more productive. Collect W-2’s, 1099s and tick off this  helpful checklist.
  2. If you have a Health Savings Account, you can still contribute until Tuesday, April 17th, 2012. The limit for 2011 contributions is $3,050 for individuals and $6,150 for family contributions. There is also a catch-up contribution of an additional $1,000 if you are over 55 and not enrolled in Medicare.
  3. File electronically and receive your refund sooner. Invest your refund rather than spending it!  Get started on your retirement contribution and start your 2012 tax planning now. If you have to pay a surcharge, don’t file electronically since 2.5% of your bill if you pay with credit card.
  4. Take advantage of TurboTax’s free federal tax filing. There is no shortage of tax filing services out there but there are few that are free without any gimmicks. TurboTax allows you to file for free, which is a huge cost saver. For a limited time, if you file through TurboTax, you have the chance to win $1,000 on a free rewards program called SaveUp. By entering your TurboTax order number on SaveUp.com, you are automatically entered into a $1,000 drawing that is exclusive to TurboTax customers using SaveUp. SaveUp is a program that rewards users with virtual credits for saving and paying down debt. Credits can be used to enter to win prizes like the “Double your Refund” prize, where SaveUp and TurboTax offer the opportunity to win a cash prize worth two times your 2011 tax return.

Here is what you can do to stay ahead of the game for next year’s taxes:

  1. Make contributions to a 401(k) or IRA. Unfortunately, this won’t help with your 2011 return, however it will be beneficial to start planning and contributing for 2012. If you receive a refund this is a great way to use it!
  2. Child Care Credit can reduce your tax bill dollar for dollar. This can save you thousands of dollars depending on qualifying criteria.
  3. Pool Expenses in one year:
    •  Medical Expenses – If you make payments exceeding 7.5% of AGI in one calendar year they can be deducted.
    • Job searching expenses – This is a miscellaneous deduction subject to a 2.0% AGI limit and unfortunately, is not for first time job seekers
  4. American Opportunity Credit This credit must be used for qualifying educational expenses for four years of higher education. It can be claimed up to $2,500 per student, calculated as 100% of the first $2,000 and 25% of the subsequent $2,000.

Hopefully these tips will help you file now to avoid filing an extension and potentially paying penalties.