Kira Botkin Kira is a longtime blogger and serial entrepreneur who enjoys gardening, garage sales, and finding stray animals. She lives in Columbus, Ohio, where football is a distinct season, and by day runs a research study for people with multiple sclerosis. She hopes that the MoneyCrashers team can help you achieve your goals and live a great life.
In an effort to help make filing taxes easier this year, we are breaking down the various IRS tax forms to help you know if you need them, and how to use them.
If you were working as an employee and were paid during the year, you should receive a W-2 from the company you worked for, postmarked by January 31st. It will show information on all compensation you received during the calendar year, even if the actual time you worked was in the year before, or your company uses a different fiscal year.
The IRS is often portrayed as a scary group of calculator-wielding mercenaries who are just out to get more money out of you, but in truth you only have something to fear if you’ve intentionally falsified your taxes or are guilty of tax evasion fraud.
Nevertheless, you may still be audited during your lifetime, either as part of a randomly selected group, or because you have certain red flags in your return. The IRS generally has up to three years after you file or the due date (whichever is later) to audit your return, but it can audit up to six years in some cases. If you file a fraudulent return or don’t file at all, there is no statute of limitations on when the IRS can audit you.
Finding the right person or company to care for your child or disabled spouse is difficult, and paying for it can become very expensive.
Fortunately, you can get a break on these expenses by filing for the child and dependent care tax credit.
And depending on your income and how many people need care, you can get up to a $2,100 credit. Below is more information regarding the credit, including who qualifies as someone who needs care, what kind of expenses count, and who can claim the tax break.
If you’re in a hurry to get your tax refund faster (and who isn’t?), make sure your tax return won’t be delayed by common mistakes.
There are a handful of common errors that the IRS regularly deals with. These mistakes signal an immediate red flag and cause your refund to be delayed by weeks or months as the IRS tries to sort things out or asks you to re-file.
Especially if you file on paper, make sure to double-check these easily overlooked items.
First introduced in 2009, the Making Work Pay tax credit was available for two years – 2009 and 2010. With this credit, you were able to receive a bonus of up to $400 (or $800 if you filed as married filing jointly) just for working.
However, this tax credit was not renewed by Congress following 2010, and is not available for tax years 2011 and later.
How the Making Work Pay Tax Credit Is Calculated
If you had any income from a job or self-employment during the years this credit was available, you can calculate your Making Work Pay credit based on your earned income. You also must file Schedule M to claim the credit – even if you received it as an income boost in your paycheck.
In fact, there are a range of federal tax credits available that run the gamut from installing a geothermal heat pump to installing new insulation. If you’ve recently made improvements to your home, or are considering it, check the list of available tax credits and make sure to claim the ones you qualify for.
The only thing worse than paying taxes is inadvertently paying more than you have to. You can avoid this by taking advantage of the common and commonly overlooked deductions. It’s best to be aware of these all year long, so you can maximize your deductions and maintain good records.
Even if the tax filing deadline is rapidly approaching, it still pays to know which deductions you could be eligible for so you can dig up old receipts to claim them. See if you can reduce your taxes or increase your refund by claiming any of the following.
Stocks are generally thought to be risky investments (when compared to investing in bonds). And even though the average annual yield is great at around 12%, the market can be difficult to predict. However, there are ways to remove some of this risk by investing in dividend reinvestment programs (DRIPs). These programs can remove some of the brokerage and investment management fees that would otherwise eat away at your investment.
Book Giveaway: Read this review of Secrets of a Stingy Scoundrel, then leave a comment with the most low-down or annoying thing you’ve done to earn or save money. Best story wins a copy of the book! Deadline for submission is this Friday - February 11, 2011.
Do you ever feel like there’s more you could do to be frugal and save money? Perhaps you’ve taken to rinsing and reusing sandwich baggies, or cutting up old clothes for cleaning rags.
Like the types of auto insurance, homeowners insurance is actually a bundle of different categories of coverage, which apply in various situations.
You aren’t able to pick and choose what categories you want – there are six different components to homeowners insurance, all of which are required, which we’ll discuss below.
However, depending on your possessions, type of home, and your financial cushion, you can choose a coverage level for each category to get a plan that works best for you, while keeping your costs down.
We all know that the Internet has revolutionized how folks sell their spare stuff for extra income (i.e. selling things online on eBay or Amazon), but did you know it can also help turn your free time into extra income?
Have you ever seen advertisements for work as a mystery shopper and wondered if they were legitimate? Have you worked in a store that received reports from mystery shoppers? Did you ever want to know more about your mysterious patrons?
Mystery shopping, when done right, is a legitimate way to make money and visit new businesses. I work as a mystery shopper in addition to my full time job. I like the work because it is flexible and often, it helps me to save money on my purchases. I’m writing this piece in order to help take the mystery out of mystery shopping. If you’re interested in getting involved, or just want to learn more, you will find a lot of answers to your questions here.
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