HUNTSVILLE, Ala. (WHNT) – We have a Money Saving Monday report that may come in handy between now and Tax Day, April 15th!
It includes a few things to help you save money and make life less “taxing” on you.
February is a peak month for tax attorneys and CPAs as Americans get ready to settle up with Uncle Sam.
And WHNT NEWS 19 found there are a few things filers are overlooking that translates into leaving thousands of dollars on the table.
The most common ways are not taking advantage of the Earned Income Tax Credit (EITC) or filing under the wrong status.
WHNT NEWS 19 spoke with a local tax professional who’s been doing taxes for clients for 33 years.
Barbara Black of Huntsville says each year the tax code changes, it gets more complicated and the majority of tax returns she sees that individuals prepare by themselves are full of costly mistakes.
It’s a hot topic online on social media sites Facebook and Pinterest too.
Back to the EITC and there are a lot of families missing out on money.
“One in five families that are eligible for that don’t claim that and that’s because it’s a very complex set of rules,” said Black.
She said it amounts to up to $5,800 of money to be refunded to families who support children on a lower income. It takes into account who lives in one’s home and their relation. And with costs of living increasing, more families are qualifying for it.
“As the figures have increased over the years…even a married couple with income over the $50,000-range would still be eligible for some earned income tax credit,” said Black.
On the topic of marriage, that’s another way filers miss out on money Uncle Sam may owe them: by using the wrong status.
Black said it’s rarely advantageous for a spouse to check “married but filing separate.”
“There are a lot of credits to which ‘married filing separate’ people don’t get,” said Black. “Earned Income Tax Credit is one. You cannot get that if you’re ‘married filing separate’.. education credits, you can’t have those if you’re ‘married filing separate’, daycare expenses, if you’re ‘married filing separate’.
Also, the Congress extended several education credits that bring dollar for dollar reimbursement if you have a student living in your home.
And it’s worth browsing Facebook and Pinterest for some extra advice which includes where you can go to get your taxes done for free.
Here are a few more tricks: if you have a part-time job, that’s self-employment income and not to be included with W-2 money. You can deduct any expenses you’ve had to put out to do that part-time job.
If you contribute to a 529 plan for college for your children, you can deduct that on your state taxes, but not federal.