When you file your taxes, you may be able to claim a tax deduction. A tax deduction allows you to save money on your taxes. Current tax deductions include mortgage interest paid and student loan interest paid. Including tax deductions on your tax return may lower your tax bill. Consult a tax preparer, accountant or enrolled agent to know for sure.
Get Your Taxes Done For Free
Tax time means paperwork, which is especially tough for those taxpayers who either lost a job or took on a second job last year to make ends meet. Tax preparation services can help, but you'll pay hundreds of dollars to have your tax forms filled out. The good news is, if you earned less than $35,000 last year, you can get your taxes done, for free, in Chicago.
Tax Breaks Available For Homeowners
Most homeowners know that they can deduct the mortgage and real estate taxes they pay from their federal income tax forms. But there are some other deductions you may be able to take as well. In addition to the regular tax breaks for your mortgage and home equity loan interest you pay, you can also get a regular deduction if you have a home office. One of the great tax benefits is the ability to take your profits tax-free when you sell your home.
Roth IRAs And 401(k)s Differ In Taxes
What should you consider when you're debating between a Roth IRA and a 401(k) plan? A Roth IRA and 401(k) plan differ in when the money you invest gets taxed. With a Roth IRA you're investing after-tax dollars whereas you invest pre-tax dollars in a 401(k). Roth IRA earnings are tax-free whereas 401(k) money gets taxed when you withdraw it.
Investment Property Tax Deduction Requirements
Investment property may qualify for certain tax exemptions, but it must follow strict requirements. In general, if you live in a property for two out of the prior five years (the order of when you've lived there is not important), and the property was your primary residence for two years, you are entitled to exclude $250,000 of the gain in the sale of the home from any taxes. Contact a tax account for more information.
Health Savings Accounts: Medical IRAs
The Health Savings Account is a tax-sheltered savings account similar to the IRA, but earmarked for medical expenses. Like an IRA, deposits into health savings account are 100% tax-deductible for the self-employed and can be easily withdrawn by check or debit card. HSAs can accumulate from year to year, if you're healthy and don't need to use the money.
Used Car Donations
Do you need to pump up your year-end donations? You might want to consider donating, rather than selling your used car. Donating your vehicle to a charity allows the charity to make money by reselling the car.
Prepare Early For Tax Time
It's not even the end of the year, but fall is the perfect time to start thinking about your taxes. With plenty of time left to spare in the year, you can make sure you pay the right amount next April 15, or even maximize your deductions.
Simplifying Tax Returns With Online Programs
Once you've got your deductions lined up, wouldn't it be nice to know where your W2 is? Especially now that it's tax time? A new online payroll service called Surepayroll allows you to access your pay information, 24/7 from any computer in the world with internet access. Other programs allow you to calculate the exact deduction value of your charitable donations and contributions.
Income Tax Filing Help Comes From City
You may want some help in filing your income taxes electronically and not know where to go. The City of Chicago offered free income tax filing help to residents including filing for the earned income tax credit. Mayor Daley encouraged income tax filers to sign up for bank accounts so they could have their income tax refunds direct deposited.