I compiled seven tax tips from the IRS, CompleteTax, and H&R Block, including how to file for free, and what you can deduct while job searching.
1. File for Free. If you make less than $58,000, you are eligible to file your federal taxes for free using the IRS Free File program. That makes about 98 million Americans eligible. To file your taxes for free click on the above link, then click on “Free File” in the right column. Choose one of the Free File Alliance members that comes up that meets your tax needs. Once you pick a company you’ll be transferred to the company’s website to work on and file your taxes. Speak Spanish? Three of the 19 participating software companies also offer this service in Espanol. If you do not have Internet access at home, there are 29 locations across the country where you can use the Free File software.
2. Another free filing option. If you do not use the IRS Free File program, check out the TurboTax online free federal tax filing program. Soon I’m going to update last year’s post about filing taxes for free.
Tip: About 70% of taxpayers filed electronically in 2010, according to the tax software site CompleteTax. Benefits to filing online are less paperwork and you can get your return in as little as eight days.
3. Unemployed? Still gotta file. Even if you haven’t worked in a year, still file your federal returns. Unemployment compensation is taxable beyond $2,400, unless you specifically requested taxes to be withheld by submitting a W-4V voluntary withholding form, says H&R Block.
4. Make copies for free. Make copies of your taxes for your records at Office Depot now through Apr. 15, 2011. You can get up to 25 single-sided pages free as long as they are of your 2010 tax returns.
5. Start early. Prices for tax software typically increase as we near the April 18, 2011 tax filing deadline. Make sure the software you are using guarantees that if you start your taxes today but file in a few weeks, the price will remain the same, recommends CompleteTax, a tax software program and website.
6. Deduct job searching expenses. H&R Block says the following expenses are deductible: resume preparation (typing and printing, postage, long-distance charges, advertising, and photographs if required); travel (airfare, mileage, some auto expenses); meals, and lodging (actual expenses only).
Tip: Haircuts, clothes necessary for a job interview, and classes to learn new skills outside your trade cannot be deducted, says CompleteTax.
7. Deduct work-related expenses if you are not reimbursed for them. H&R Block shared this list of work-related expenses that can be deducted, including bonding, employer-required physical examinations, office supplies not provided by your employer, professional or trade association dues, research, lecture and writing expenses, safety clothes and equipment, union dues, personal tools and equipment, travel, meal and entertainment expenses (see Publication 463), computers and mobile phones (see Publication 946). These unreimbursed business expenses on line 21, Schedule A or on Form 2106.
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All of Unemployment Comp is taxable – this year they took away the non taxable $2,400 benefit