It’s the last day of February. That means it’s time to get out your shoebox full of receipts and start working on your taxes. There is only a month and half left until tax day. If you dread doing your taxes because all the forms and calculations are overwhelming and paying a CPA isn’t in your budget, you don’t need to fret anymore. There are many free resources you can turn to for help.
Here are some ways to get your taxes done for free and save more with tax credits.
Free Online File – The IRS wants to make it as easy as possible to prepare and file your taxes. That is why they have teamed up with over a dozen online tax preparation companies to help you complete and file your taxes for Free. There are residency and income requirements. Your adjusted gross income has to be $58,000 or less. And according to the IRS, 70% of taxpayers fall into this category. So this is a great place to start: www.IRS.gov/freefile
Free Help in Person – If all the numbers, deductions and credits start to get confusing and you need an actual person to help you sort it out, there’s IRS help. The IRS has set up offices throughout the state and staffed them with knowledgeable reps to help you. Multilingual help is also available. For locations, times and services visit: http://www.irs.gov/localcontacts/index.html They can’t prepare your entire return for you, but they can answer as many questions as you have.
Free Tax Preparation in Person – Getting your tax questions answered in person is great, but getting your entire return prepared in person is even better. The IRS offers special tax preparation services for free for qualified individuals. The main qualifications are either having an adjusted gross income of $49,000 or less, being over the age of 60 or being a member of the military. For all the details and locations visit: http://www.irs.gov/individuals/article/0,,id=107626,00.html
Other Free Services – For the 30% of Americans that have an adjusted gross income over $58,000 and don’t qualify for other free IRS services, you can take advantage of your relationships. If you are a State Farm customer you can get TurboTax for free. Many banks, credit unions and insurance companies offer free or discounted access to tax prep software, visit your bank’s website to see all their offers.
Tax Credits to Remember
Retirement Savings Credit – Uncle Sam wants to encourage saving for retirement. He is even willing to give you money for saving money. If you contributed to a retirement account in 2010 you may be eligible for a tax credit up to $1000 depending on your income. For income limits visit: http://www.irs.gov/newsroom/article/0,,id=107686,00.html
Home Purchase Credit – If you are a qualified first time or repeat home buyer last year, you may qualify for a tax credit worth up to $8,000. You must have been under contract by April 30, 2010 and closed on the house by September 30, 2010 and meet certain guidelines to qualify.
Energy Efficiency Credit- Did you improve your home’s insulation, replace a water heater or windows and doors last year? You may qualify for a tax credit equal to 30% of the cost up to $1,500. To see which improvements qualify visit: http://www.energystar.gov/index.cfm?c=tax_credits.tx_index.