Remember to File Taxes

It’s that time of year again to file for taxes, at least in the United States. Have you filed yet? The deadline is April 15th, unless you file for an extension. The date is coming very soon.

You have a few ways to file:

  1. Use the IRS Free File service at: (http://www.irs.gov/efile/article/0,,id=118986,00.html) This applies if your adjusted gross income was $54,000 or less in 2007.
  2. Use H&R Block (http://www.hrblock.com/ – not an affiliate link) both in person at an office or by using one of their software packages. Can be limited due to the software might not include all of the special deductions you may want to take.
  3. Use a CPA (Certified Public Accountant) to prepare your return. They are more knowledgeable than someone that does taxes a few months out of the year and only had a four hour training class.
  4. There are other ways to file including a paper return done yourself, Liberty Tax Service, Jackson Hewitt and a myriad of online websites.

Why file? When Jesus was asked if it is right to pay taxes, he said “Render to Caesar what is Caesar’s. Give to God what is God’s.” And because the taxes help pay for:

  • The roads you drive on
  • Police and law enforcement (to include the judicial system).
  • Firefighters and medics
  • Recreation areas and national parks
  • Military– even if you don’t agree with everything they are ordered to do.
  • And a lot of other services- I don’t agree with them all either, but I vote to try and have my voice heard. You should vote too.

Remember to include all your methods of income:

  • W2s from jobs you worked
  • 1099s or K1s from being an independent contractor or any business entities (affiliate income included)
  • Interest income on savings and checking accounts
  • Any other income- Ebay, etc.

List of common deductions:

  • Charity– Church, Boy Scouts, Red Cross and all the other tax deductible organizations that you donated to during the year. I don’t give to the charities to get a tax deduction; I do it because it’s right. Some people would say it is socially responsible.
  • Education– Right from the IRS webpage at: http://www.irs.gov/taxtopics/tc605.htmlThere are two education tax credits available, the Hope Credit and the Lifetime Learning Credit. The credits are based on education expenses paid for you, your spouse, or your dependents. During any particular year, you can claim only one of the credits for each student.
  • House Interest– Most of the money you pay each month to the mortgage company is going toward interest, not principal. Get this big deduction; just make sure you have the statement showing how much the interest was for the year from them.
  • Medical costs– This only affects you if it becomes over 7.5% of your income. (http://www.irs.gov/publications/p502/ar02.html#d0e294) Otherwise it is smart to use a healthcare savings account during the year if your employer has one.
  • There’s a lot more, some will apply and others won’t.

For more information visit the IRS website at:
http://www.irs.gov/index.html

In Spanish or Español:
http://www.irs.gov/espanol/index.html

Taxes Due Soon,
Sam Carrara

Disclaimer: I do not work for the IRS, so refer to their website for rules and regulations. I wanted to post the above information to help people be more knowledgeable about options available. I don’t recommend or dis-recommend any of the services above due to not having recent experiences with them (I prefer to use a CPA).

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Wednesday, March 26th, 2008 Finances

2 Comments to Remember to File Taxes

  1. I almost forgot about doing my taxes. Some good points to remember. Thanks for the reminder.

  2. Paul on March 26th, 2008
  3. I just understood the importance of filing taxes. I was always careless of it. You gave a nice awareness while posting this. Thank you

  4. Gokul on October 4th, 2009

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