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Paying taxes is a part of life, it’s something that we can not avoid. But the amount you pay makes a big difference! There are ways to reduce the amount you owe at tax time, and this article will list three ways for you to start.

1. Make use of tax credits. Everyone knows that tax credits are better than tax deductions. Tax credits can lower the amount of money you owe to the IRS. If your child is currently studying in college, you can claim the education tax credit. You can open a Coverdell education savings account, you can put at least $2000 into an account especially for your child’s educational expense.

Parents can also opt to use the HOPE tax credit, also known as the Lifetime Learning tax credit. If… Continue reading

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When it comes to tax time, lots of people keep saying that they wish they had better planned for it. No one wants to be doing a last minute rush job during tax time, so tax planning is a must do.

For your whole year to flow smoothly, you need to sort out your tax situation early, this is what tax planning is all about. Instead of being in a situation when you’re desperate for deductions to avoid paying IRS, you could plan well, and get all your tax benefits in order. Once your taxes are wrapped up for this year, you should start planning for the next year. And we have some tips to help you a long the way:

1. Valid social security number

In order for you to claim earned… Continue reading

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Owning your business is no easy feat. To keep it running and make money is hard work. No one wants to pay more money to the government than they have to. There are taxes that you may pay as a business owner that can be deducted at the end of the year as part of your business expenses. The list below is a good start:

1. Real estate taxes for improvements. This is a deduction for improvements that have been ordered by the city or state for the general welfare of the public. For example if the government levies taxes for improvements for the area where your office is located, you can deduct the part of the tax that went to interest as a business expense. Don’t forget that taxes must… Continue reading

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When it comes to deductions and tax returns, do you know all your options? Many people use the 1040EZ or 1040 forms, like you, they don’t know all the options out there. This article will highlight some facts concerning both types of deductions.

The 1040 form is for standard deduction that depends on your tax filing status. If you’re married, filing jointly, a qualified widow or house of household, then you get the highest deductions. If your filing as a single or married, filing separately you will get less deductions. The deduction amount is determined by the IRS, and will only change if the IRS deems fit.

But other than the standard deduction, there are other options, this is called itemized deduction. You don’t have to be wealthy to itemize, most people… Continue reading

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Most people are filled with f ear when it comes to doing their taxes. People start fearing what would happen if they filled in wrongly, and will there be penalties from IRS. What if you forget something? If you want to reduce your tax bill and your anxiety, why not use tax credit? Tax credit is better than tax deduction, because tax credits reduces the amount of tax you pay. Taking on tax credits can reduce your bill, and in some cases they can even get you a refund.

Most people are not aware of tax credits and whether or not they qualify. These credits are perfectly legal, useful and are available to everyone who qualifies. The most common one is the earned income tax credit. If you’re single or married… Continue reading

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Before we jump in too deep, let’s talk about what Earned Income Credit (EIC) is. EIC is a tax credit designed to provide people with an incentive to work. This credit is only for low to middle income families and there are qualifications to be met. It’s not easy getting to know this credit, so be careful if you intend to claim, as there are penalties for those who are not entitled.

The government set up the EIC for people with low to medium wages, it might seem easier to apply for assistance from the government than to work for their low pay check. But the EIC will give you a substantial refund when it’s tax time.

Another good side to EIC is that it doesn’t affect welfare benefits. For example if… Continue reading

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