“I’ve been dreading tax season. I’m already having a tough time making ends meet, and now I probably have to pay a tax preparer and pay money to the IRS. Please help!” – Joan from Minneapolis, MN
While tax time can be stressful for many of us, it is also a great opportunity to get money back and boost your finances. To make the most of your tax refund this year, be sure to take advantage of free and low-cost services to file your taxes, and claim all of the credits for which you are eligible.
Keep in mind that the open date for most individuals to begin filing their taxes is January 30, 2013. If you are claiming residential energy credits, depreciation of property or general business credits, you will need to wait until late February or early March to file.
Get Free Help Filing Your Taxes
According to the International Revenue Service (IRS), more than 80 percent of taxpayers pay agencies to prepare their taxes or purchase tax preparation software. That is money you can use to pay bills and save for future expenses such as retirement or education.
If you make $51,000 or less, you are eligible to go to your nearest Volunteer Income Tax Assistance (VITA) site where you can meet with a trained VITA volunteer who will prepare your taxes for free. Many IRS Volunteer Income Tax Assistance (VITA) sites have also incorporated asset planning so you and your family can learn money management and financial planning skills to spend your refund wisely.
If you are over the age of 60, you can take advantage of the TCE Program, which offers free tax help including assistance navigating pensions and retirement issues. Visit the AARP Foundation’s Tax Aide Program website to find a TCE site near you.
If you make $57,000 or less, check out MyFreeTaxes.com where you can e-file your federal return at no cost.
Claim Your Tax Credits
Did you know that if you earned around $50,000 or less, you may qualify for the Earned Income Tax Credit (EITC)? The EITC is a refundable federal tax credit for people who work full or part time but earn low or moderate wages, and can help you earn a tax credit worth up to around $5,800.
In addition to seeing if you qualify for the EITC, make sure to ask yourself these questions before you file your taxes this year:
- Do you have children? Working parents can claim up to $1,000 for each child under 17 with the Child Tax Credit (CTC). If you have been working and paying for child care, the Child and Dependent Care Credit can help you cover those expenses as well.
- Are you a student or have students in your household? The American Opportunity Tax Credit (AOTC) and Lifetime Learning Credit are available to students to help cover many education expenses.
- Are you saving for your future? If you make eligible contributions to a qualified IRA, 401(k) or other retirement plans, you may be eligible for the Savers Credit that is worth up to $1,000 or $2,000 if filing jointly.
- Are you just learning about tax credits? Don’t forget to claim your EITC and CTC refunds for up to three previous years!
To check if you qualify for EITC and other tax credits, visit the IRS’s web site at www.irs.gov/eitc.
If you or a friend needs free tax preparation services, please call your local Goodwill agency or the IRS VITA hotline at (800) 906-9887. Good luck!