Ignoring a tax liability is never a good idea. If you don't have the money to pay the IRS, consider using a credit card or asking for more time.
This post is by Kelly Phillips Erb of Forbes.com.
We hope that, if you fall in the latter category this year, the amount that you owe isn't too bad. But if it’s more than you counted on, don’t panic and do something to make it worse. Instead, take a deep breath and consider these options for paying your taxes if you don't have the cash:
Put it on your credit card
I’m generally not a fan of replacing one debt with another. But if your ability to pay is a timing issue -- as opposed to a "I simply don’t have it" issue -- you can pay your federal income taxes by credit card. The Internal Revenue Service accepts all major cards (American Express, Discover, MasterCard or Visa).
If you're one of the millions of Americans who work from home, don't pass up a deduction that could be worth thousands. Here's how to tell if you qualify.
This post comes from Brandon Ballenger at partner site Money Talks News.
Between 15million and 20 million U.S. workers either telecommute or are self-employed, according to the Telework Research Network. But the Internal Revenue Service said only about 3.4 million claimed a home office deduction in tax year 2010.
While it's possible many of those self-employed or telecommuters don't qualify, it's also possible the fear of an audit could be keeping people away. But a home office deduction can be valuable, and those eligible should take it.
Everyone can use a variety of Web-based programs. Some are restricted to people making $57,000 a year or less or those using certain forms.
This post is by Dawn Papandrea of Living on the Cheap.
If you’ve never taken advantage of the many free tax-filing options out there, you could be missing out. There are several free -- or low cost -- options available that will not only save you a few bucks, but will help simplify the process as well. You may also be eligible for free in-person help with tax preparation.
Here is a look at some tax-filing services that won’t break the bank. Note: Some free services aren’t available to homeowners who deduct mortgage interest or other taxpayers with itemized deductions.
The IRS offers Free File, a service that allows people earning $57,000 or less to choose from a variety of online tax software options. Those with higher incomes can file free online using the free fillable forms. The Free File Alliance, as it’s called, is a partnership between the IRS and 15 independent software providers. Since 2003, more than 36 million people have taken advantage of this program. Users choose from among the participating software offerings, file their returns electronically, and receive their refunds via direct deposit.
This year's W-2s for some employees show the value of health benefits provided by employers. Is one of the biggest tax breaks out there on the chopping block?
This post is by Laura Saunders of The Wall Street Journal.
When you examine your W-2 for 2012, pay attention to a surprising new number on the form, especially if you are an upper-income-bracket taxpayer. The figure could threaten one of your most valuable tax breaks.
The W-2 is the annual tax form with wage and salary data that employers provide to workers and the Internal Revenue Service. Companies were required to send W-2s by the end of January.
The new number appears in Box 12 after the symbol "DD." It shows the cost of your employer-sponsored health plan, if you have one. The number includes the combined amount paid by the company and the employee for coverage, but not worker contributions to flexible spending accounts or health-savings accounts — nor additional co-payments or reimbursements.
Most people use their tax refunds for bills or necessities. If you can afford to save your refund, you'll be further ahead. Here are 6 savings tactics.
This post is by Ashlea Ebeling of Forbes.com.
Last year, the average federal tax refund was $2,700. What are you planning to do with yours? "The perception is that people get a refund and buy a high-definition TV, but the reality is that people are using refunds to pay down debt, buy necessities, or save," says Bob Meighan, the lead CPA with Intuit TurboTax’s American Tax And Financial Center.
Only 16% of the customers TurboTax surveyed last year said they used their refunds to splurge on vacations or shopping, while 42% used the money to pay down debt or pay bills. Another 17% used refunds to save, including funding an individual retirement account.
Parents and guardians can get a $1,000 tax credit per child if they meet income requirements. Some can even get additional credit.
This post is by Kay Bell of Bankrate.com.
The popular $1,000-per-child tax credit was made a permanent part of the U.S. Tax Code, thanks to the American Taxpayer Relief Act, also known as the "fiscal cliff" tax bill, that was enacted Jan. 2, 2013. That's great news for parents, who find the credit is an easy way to reduce their tax bills dollar-for-dollar.
In addition to the financial benefit, there are no records to keep or extra forms to file to claim the child tax credit. You simply enter the proper amount directly on your 1040 or 1040A form.
Tax pros provide answers to common (and not so common) questions about which tax deductions are allowed, including whether you can deduct your pet. Maybe.
This post is by Rachel Louise Ensign of The Wall Street Journal.
No, this isn't a bad joke.
It's among the things taxpayers ask each year as they try to squeeze out whatever deductions they can.
And tax experts say they've heard it all.
If you installed new windows or doors or made other qualifying improvements in 2012, you may be eligible for a tax credit. Or, you can make improvements this year.
This post is by Kimberly Lankford of Kiplinger’s Personal Finance magazine.
The fiscal cliff legislation, which Congress passed on New Year’s Day, revived the tax credit for energy-efficiency improvements for both 2012 and 2013. If you made any eligible improvements in 2012 -- after the credit expired -- dig up the receipts before you file your taxes for the year because you may get a tax break after all. These new rules should also be kept in mind when planning home improvements for 2013.
You can receive up to $500 in total tax credits for eligible home improvements you've made since 2006 (including a $200 limit for windows). If you claimed the full credit for home improvements since then, you won’t be able to take the break again.
If you are eligible, the tax break applies to 10% of the purchase price (not installation costs) of certain insulation materials, energy-efficient windows, external doors and skylights, and metal roofs with pigmented coating or asphalt roofs with cooling granules that meet Energy Star requirements (see the Environmental Protection Agency’s Energy Star website for details).
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