Family economists offer last-minute tax tips
As the deadline approaches, LSU AgCenter family economists encourage taxpayers who are expecting a refund to file electronically.
“This will allow you to get your refund more quickly than filing through the mail,” says family economist Jeanette Tucker.
Tucker says another quick tip is to have the refund delivered to your bank account by direct deposit.
She warns against getting a refund anticipation loan, which will allow you to get your refund immediately from a tax preparer or some financial operations for a high fee.
“This is a very expensive way to borrow money,” Tucker says.
She also reminds low- and moderate-income filers to see if they qualify for the Earned Income Tax Credit. This credit was established to provide a work incentive for low-income earners.
To file for the Earned Income Credit, you must have earned income during the year, Tucker says. The income must be less than $35,535 if you have one qualifying child, and the income limit increases to $43,352 for three or more children and $48,362 for married filing jointly.
“If you were eligible for the credit in previous years and did not get it, then you may be eligible to file amended tax returns and claim the credit for previous qualifying years,” she says.
Some workers who owe no taxes also may be able to get money back through the credit Tucker says.
Low- to moderate-income filers and the elderly can get tax preparation help through the Volunteer Income Tax Assistance (VITA) program or the Tax Counseling for the Elderly program. VITA sites are generally located at community and neighborhood centers, libraries, schools, shopping malls and other convenient locations. To locate the nearest VITA site, call (800)906-9887.
Tucker points out that AARP offers a tax aid program to low- to middle-income individuals age 60 or older.
“Be sure to bring all your tax documents with you when visiting a VITA site or using another tax preparation service,” Tucker says.
Tax time also is a good time to review your withholdings and adjust them if necessary, says LSU AgCenter family economist Gloria Nye.
If your financial situation changed – if you bought a house, got married or started collecting Social Security, for example – you may want to change the amount that is withheld from your paycheck.
“If you have to pay more than $500 or get a refund of more than $500, rethink the number of exemptions you are claiming,” Nye says.
Although it may be nice to get a large refund, Tucker adds, “You are essentially making an interest-free loan to the U.S. government when you could have that money working for you throughout the year.”
The Web site www.IRS.gov has a calculator that can help you determine the amount that should be withheld.
“Use the results from the calculator to complete a new Form W-4, which you can then submit to your employer,” Nye says.
Doing a withholding review annually after tax time can give you more money to spend or save throughout the year, Nye says. Or it can keep you from having to pay a lump sum for additional taxes next year.
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