Tax season is here and there are a number of changes you should know about when filing your return this year. Below is information on new tax credits, scams to watch out for, and tools to help ensure you take advantage of available credits and deductions including new health insurance tax credits.
Here are a few changes that you should know about:
You will have three extra days to file and pay. The IRS deadline falls on Monday, April 18th this year. The IRS is no longer automatically mailing tax forms out to every household. To get free forms, you can call IRS Forms and Publication toll-free at 800-829-3676. Alternatively, you can file electronically for free on the IRS website.
You may be eligible for new tax credits included in the Affordable Care Act passed last March. Small employers, including small non-profit (tax-exempt) organizations and household employers, can get assistance paying for health care coverage for employees through the small business health care tax credit. Visit the IRS website for the full list of Affordable Care Act Tax Provisions.
Other money-saving credits:
Your paycheck may have gone up last year as a result of the Making Work Pay Tax Credit, part of the American Recovery and Reinvestment Act. If so, or if you were eligible for the tax credit but didn’t receive it, you may need to file a Schedule M form. Many low and middle-income families are eligible for the Earned Income Tax Credit, which rewards working families and can be worth up to $5,666 for those who make $48,362 or less in a year. Changes in 2010 to your financial, marital, or parental situation may make you eligible for it even if you didn’t qualify the year before. The maximum adoption credit goes up to $13,170 per child from $12,150.
You should be aware of some of the common scams that surface around tax filing time:
Watch out for scams that lead unsuspecting individuals to share personal information with a bogus group posing as the IRS. These scams can be perpetrated online, by email, phone, fax, or letter. Please note: The IRS does not initiate taxpayer communications through email.
“Refund anticipation loans” are loans made to individuals who want access to their refunds quickly. But these loans can be a bad deal when private companies charge consumers very high interest rates. To protect tax filers, the IRS has stopped providing certain personal financial information to tax preparers that issue such loans. As an alternative, the IRS offers e-filing of taxes and direct deposit of refunds, enabling a rapid turnaround without any fees.
The IRS website offers a number of helpful services:
Taxpayers who are 60 or older, or who have low to moderate incomes, can get free IRS tax help through its partnerships with nonprofit and community organizations. Some sites require appointments; find where and when you can get assistance. You can check the status of your tax refund online on the IRS website. Visit the IRS Tax tips 2011 page for additional suggestions this tax season.