Taxes

This post is by Kay Bell at Bankrate.com.

When it comes to identity thieves vs. the Internal Revenue Service, the crooks have the edge. For now.

That was the consensus at a recent congressional hearing examining what the Senate Special Committee on Aging calls an epidemic of identity theft among seniors and other taxpayers.

Why the focus on older Americans? Because many of them aren't required to file a tax return. If a person relies solely on Social Security benefits, that money isn't taxed. Even if they supplement their golden years' earnings, as long as the amount doesn't exceed a certain threshold, the income is not taxable, meaning they don't have to worry about reporting it to Uncle Sam.

This post is by Kimberly Lankford at Kiplinger's Personal Finance Magazine.

Q. When I was doing my 2012 tax return this year, I realized that I could have claimed the child-care credit for my son’s summer camp expenses in 2011, but I didn’t know I qualified then. Is it too late to get the money?

A. It’s not too late. You have up to three years after the due date of your return to file an amended return and claim the credit.

The child-care credit is a frequently overlooked tax break for people who have kids under age 13 and pay for child care so they can work or look for work. The cost of a nanny, babysitter, day care, preschool, before-school and after-school care, and day camp during summer and school vacations can all count.

This post is by Tom Herman of The Wall Street Journal.

If you aren't required to file a federal income-tax return, why bother?

Answer: You might be missing out on a valuable federal program designed to help the working poor.

Welcome to the earned income tax credit, or EITC. It's known as a "refundable" credit because, unlike many other tax breaks, you can get money from Uncle Sam even if you don't owe a penny in tax.

But to collect, you have to file a tax return. Even though April 15 has come and gone, it isn't too late to act.

This post is by Andrea Coombes of MarketWatch.com.

Planning for taxes is complicated, of course, and will vary depending on your situation. Consulting an expert makes sense, and now that the annual April 15 filing deadline is past, some tax pros may have more time to chat about a long-term strategy.

And don’t forget you’re at the whim of Congress, which can mean smaller changes are better than drastic ones.

"You don’t want to make a huge decision today that you think is going to be this great tax move and have the tax law change in 10 years," said Scott Halliwell, a certified financial planner with USAA, a financial-services firm for military personnel, in San Antonio. "With taxes, everything in moderation is better than all or none,” he said.

This post is by Richard Satran of U.S. News & World Report.

What could be wrong about getting a $3,000 check in the mail?

It's great news if you're like most Americans who have been strapped for cash. The average refund is just under that amount, surveys say. But millions of people use their refund in a way that virtually assures they'll have less cash in the future than they might have had — and for some, the money can be misspent and become a negative.

Studies of consumer behavior show that people spend money very differently depending on how it is acquired. In a well-known "windfall" study from 1994 at University of Michigan, students who earned money the hard way, pouring tar for a summer job, spent it at the same rate as suntanned lifeguards who spent their days toiling at the beach. But cash from "windfalls" like tax refunds or other kinds of "found" money were sometimes spent twice as fast as earned money.

This post is by Kimberly Lankford at Kiplinger's Personal Finance Magazine.

This is the perfect time of year to go through your old files and shred financial records you no longer need. The IRS generally has up to three years after the tax-filing deadline to audit your return, so you can get rid of a lot of paperwork after April 15.

Don’t toss your tax returns (including your 1040 and supporting tax forms); you should keep them forever. They can provide important information in the future -- if, for example, you need to provide tax information when applying for a mortgage or getting disability insurance. You can keep the paper forms or digital copies.

But go ahead and ditch supporting documents three years after the tax-filing deadline. That includes credit-card statements, canceled checks or receipts to show deductions, letters from charities reporting gifts, and paperwork reporting mortgage interest or capital gains distributions. See IRS Publication 552 Recordkeeping for Individuals for more information about tax records.

This post is by Ashlea Ebeling of Forbes.com.

Are you one of the 13.5 million Americans covered by a high deductible health insurance plan coupled with a Health Savings Account?

Pay attention. You may still have a good way to cut your 2012 tax bill — and you probably don’t know about it. If you contributed less than the legal maximum to your HSA account through payroll deductions during 2012, you can still top out your 2012 contributions now and cut your 2012 taxes.

What? Your employer didn’t tell you about this? That’s not surprising, because you don’t make this after-year-end contribution through your employer. Instead, you send the money directly to the bank that holds the HSA account, just as you contribute directly to an individual retirement account. (If your HSA is administered through UnitedHealthcare and its Optum Bank, you may have gotten, and ignored, an email explaining how you can do this. Even if you didn’t get an email, your HSA administrator should be happy to take your money directly. If you can’t find directions on its site for how to do this, call and ask.)

This post is by Laura Saunders of The Wall Street Journal.

Hoping to trim your tax bill for 2012? It isn't too late to make a few smart moves.

Contribute to a traditional or Roth IRA by April 15. The upper limit on contributions is $5,000, or $6,000 if you are 50 or older. You must have at least as much earned income as your IRA contribution, and income limits apply.