Take Advantage of These Money-Saving Tax Tips Before You File
As another year comes to an end another tax season begins. The 2018 tax season is almost here, are you ready?
Wouldn’t it be nice to get a tax break to help cover the cost of holiday expenses? Take advantage of the tax benefits available to you by getting educated and organized before your tax filing is due. Here are six tips to help you have a winning 2018 tax season.
Contribute to Your 401(k)
If your employer offers a 401(k) or other type of pension plan, make an effort to contribute as much as you can – especially if your employer offers matching. All the funds you contribute are tax-deferred and grow tax-free, making it a better way to spend your money.
If your employer doesn’t offer a retirement plan, you can still put tax-free money away by opening an individual retirement account or Roth IRA.
Protect Your Identity
Tax payers will need an Identity Protection PIN or IP PIN to file 2017 tax returns and future returns. The IP PIN is a six-digit number assigned to eligible taxpayers that helps prevent scammers from using your Social Security number to submit fraudulent returns. This pin changes each year, so if you do not receive yours by mail you’ll need to visit the IRS website to access it before the 2018 tax season.
Take Advantage of the Income Tax Credit
If you worked and earned under $53,930 in 2017, you can use the EITC Assistant tool to determine if you qualify for the income tax credit. You must file a tax return to receive the credit. One out of every five workers don’t claim the valuable credit, according to the IRS. Don’t be one of those people.
You can earn back money by donating items to charitable organizations that accept items other than cash. The tax deduction is limited to the item’s fair market value, and the items must be in good condition to be eligible for the deduction. If the value of your donations is over $500, you’ll need to complete Form 8283.
Collect Education Tax Breaks
If you or someone within your household had higher education costs in 2017, you may qualify for tax savings. There are three different credits you may qualify for:
- American Opportunity Credit
- Lifetime Learning Credit
- Tuition and Fees Deduction
Each credit comes with its own set of requirements that may limit the benefit. Use the Interactive Tax Assistant tool to navigate education tax breaks, and collect your tax savings.
The quickest and easiest way to collect your tax refund is to file an electronic return and select direct deposit. IRS direct pay makes it easier to pay tax debt by setting up an electronic transfer from your checking or savings account. Keep a digital copy of your tax return filing for your records. You may need that document for many reasons including loan applications.
This post is not intended to be a solicitation for a loan. Pomo One Marketing, Inc. provides these blogs for entertainment and informational purposes only. Remember to consider all your financial options before making any decisions related to credit.