The Smarter Way To File Your Taxes

%24 THE SMARTER WAY TO FILE YOUR TAXES THE FILING SEASON DEADLINE FOR YEAR 2011 IS TUESDAY, APRIL 17, 2012. Even Benjamin Franklin knew taxes to be a certainty of life, so be smart about them. Choose the right preparation service, double check the most overlooked deductions, and get the most out of your refund. COMPARING TAX PREPARATION SERVICES Popular Online Tax Services TurboTax Choose Easy. TAXACT. H&R BLOCK Services Provided Offers Free Federal Basic: $19,95 Deluxe: $29.95 Premium: $49.95 Basic: Free Deluxe: $9.95 Deluxe: $29.95 Premier: $49.95 Upgraded Services Home & Business: $74.95 $14.95 w/ Free Federal; $8.00 w/ Deluxe $27.95 - $34.95 $36.95 State Return Support Options Phone $$ Email Live Chat Audit Support фф Tax Consulting $$ Retail Offices = included SS = prices may vary Average Time Required for Filing Your Taxes Form 1040 Form 1040A I Form 1040EZ Number of Hours 3 6. 10 Record Keeping 22 hours Tax Planning Estimated time needed for completing and submitting Tax Form 1040 without Form Completion Professional Tax Preparer $290 Form Submission Estimated average out-of-pocket costs for tax preparation, filing, and submission of Tax Form 1040 All Other without a Professional Tax Preparer You May Want To Hire A Tax Professional If You: • Own a business • Have rental properties • Have complicated stock transactions • Filed for divorce • Sold property • Have employee stock options • Have cancellation of debt issues • Filed for bankruptcy • Received a major gift or prize • Are generally confused Average Tax Prafessional S233 Fees For 2011 Tax Season: $233 $128 For an itemized Form For Form 1040 without itemized deductions 1040 and State Return and State Return COMMONLY MISSED DEDUCTIONS Another important reason to hire a tax professional is to catch errors and keep from missing deductions before you file. The following are six commonly missed deductions. CHARITABLE NONCASH CONTRIBUTIONS • Includes old clothes and other items donated to charities • $0.14 per mile to and from a charity where you volunteer • Will need to itemize on tax return --------------------------------------- UNEMPLOYMENT DEDUCTIONS • Eligible if you looked for a job in present occupation • Includes resume preparation and employment agency fees • Must itemize; needs to exceed 2% of adjusted gross income HIGHER EDUCATION EXPENSES • Includes tuition and fees, room and board, books, and supplies • Maximum deduction benefit of up to $4,000 • School should send Form 1098-T for tuition breakdown INVESTMENT AND TAX EXPENSES • Categorized under Miscellaneous Itemized Expenses • Total must exceed 2% of adjusted gross income EDUCATOR EXPENSES • Eligible educators can deduct up to $250 • Includes materials such as books, supplies, and computer equipment • Expenses must qualify as "ordinary" and "necessary" by IRS HEALTH INSURANCE PREMIUMS • Includes long-term premiums based on your age • Medical expenses must exceed 7.5% of adjusted gross income • Can deduct 100% if self-employed to extent of net income SMART DECISIONS WITH YOUR REFUND Most refund checks will go right into savings or paying off debt, but to get your refund to work for you, consider making decisions that will affect next year's tax return. How Taxpayers Spend Their Refund Savings 43.8% Other 5.2% Vacation $2,913 11.3% Average refund amount for 2011 filing season Major Purchase 12.3% Pay Down Debt 39.4% Everyday Expenses 28.7% Super-Charge Your Refund For Next Year Creating Tax Credits Potential Tax Credit Investment(s) Credit Benefit Renewable Energy/ Investment Tax Credit • Geothermal heat pump • Small wind turbines • Solar Energy Systems • Fuel Cells 30% of total development Lifetime Learning • Take one at an eligible educational institution. more courses Tax Credit Up to $2,000 Income must be <$60,000 or <$120,000 if married, filing jointly Creating Tax Deductions Potential Tax Deduction Investment(s) Deduction Benefit Charity and Volunteerism • Donating money and/or used clothes Based on individual • Volunteering at a non-profit organization contributions Retirement Fund • Adding money to an IRA, SEP. SIMPLE, or solo 401(k) retirement plan Based on individual contributions Learning how to be tax smart can save you a little or a lot. Always consult a tax professional for the best advice on how to manage your individual financial situation. Brought to you by CheapSally.com SOURCES: irs.gov | nextadvisor.com | tax-software-review.toptenreviews.com | articles.marketwatch.com money.msn.com nrf.com energystar.gov taxes.about.com DISCLAIMER: The use of any trademarks in this Infographic do not represent any affiliation between Cheap Sally, LLC and any company and/or associations included within the infograph. H&R Block, TurboTax, and TaxAct are the trademarks of each respective company. %24