Written by Natalie Pace
Consider these key points before e-filing your tax return. You may miss out on numerous benefits, including potential tax credits and retirement account contributions. With the Obama administration promoting eco-friendly behavior, using energy-efficient improvements could qualify you for considerable tax incentives. If you didn’t act green last year, you can still take advantage of these benefits in 2011.
IRA Contributions: Until April 15, 2011, you can continue making contributions to your IRA, applicable for the year 2010. Visit the IRA contribution page at IRS.gov to find out more about what you can do today. Programs like Turbo Tax and professional accountants can help you make your contributions before finalizing your return. Keep in mind, however, that contributions to Roth IRA are not deductible.
Charitable Contributions: If you donate to charities, you can claim tax deductions by filling out the correct form. While donations towards events like the Japanese earthquake and tsunami will be declared on your 2011 return, your contributions to aid Haiti should be included in your 2010 tax return.
Health Savings Accounts: This is a great savings method that benefits both your personal wealth and bottom line, all while lessening your tax liabilities and insurance premiums. The best candidates for Health Savings Accounts are healthy individuals who have the capacity to avail catastrophic health insurance while simultaneously paying into a tax-deductible retirement plan. If untouched, these accounts will roll over annually, accumulating returns on investments that are tax-free.
Free Federal Online Filing: This is the most convenient way to complete your taxes. Visit the IRS.Gov website and click on the FREE File icon to access a list of qualifying software companies. These tools cover all the necessary questions and help you claim any eligible deductions.
Education Exemptions: If higher education expenses are for you or a family member, you might be able to claim a deduction. You could also qualify for an early distribution from your IRA to cover qualified education costs, and potentially dodge early distribution penalties and any subsequent tax.
Energy Efficient Products: If you have purchased an Electric Vehicle (EV) or made energy-efficient additions to your home, you may be eligible for significant tax credits. For more information about these credits visit the IRS Tax Tip # 2011-49. And remember, it’s dramatically cheaper to charge an electric vehicle than to fill a tank with gas.
FAQs: For answers to common tax questions, visit the Frequently Asked Questions page on IRS.Gov. Many online tax services update with the latest legal changes, providing an easier way to stay informed, rather than navigating the complex tax code on your own.
