It’s tax time again, at the time of the writing of this article, and you know what that means. It means painstakingly going through your years expenses, any potential tax deductions that you can take to lower your tax bill or increase you return, and making sure you maximize the allowable tax credits you are entitled to.
This way, you get to save as much of your hard earned money as you can, instead of paying too much to Uncle Sam. After all, there is a such thing as patriotism, but let’s not get too out of control with that concept
The difference between a tax credit and a tax deduction is that a deduction lowers your taxable income, while a tax credit usually is a full dollar amount credit, deducted from the amount of taxes you will have to pay. Let’s talk about some of the current tax credits that are available this year (2011 for the 2010 tax year).
Remember, the tax laws are always changing, so it’s important to consult a qualified accountant when you go to file to make sure they are all still valid credits.
As tax season begins, people begin to search for tax credits on their return which will increase their refund amount or at least lower their tax bill. There are a few well hidden tax credits to look for on your return. One of those credits is the Making Work Pay credit.
This can grant up to $400 for a single individual or $800 for a married couple. This credit will reduce the tax you have to pay, which may either increase your refund or at least reduce the amount you owe.
When preparing your own return, be sure that you are looking at all of the available credit options on your taxes. There are many. If you use an online program, most offer you the option to see if you qualify. It’s a good idea to run through the steps, even if you don’t think you will quality. Sometimes there are other options that are not obvious that will allow you to take the credits on your return.
When searching for a credit that you may qualify for, it’s important that you understand how the credit works and how to qualify for it. For example, you can qualify for a reduction if you contribute to an IRA.
However, you must contribute to the IRA to receive the amount of the deduction. Qualified accountants can help you determine which credits you can qualify for on your return. They can also help you not exceed any maximums or go lower than any minimum dollar amounts that are required to receive a credit or deduction.
Many people today use online programs to do their own taxes as the programs have become very simple to follow and are more cost effective than using a bookkeeper or accountant. However, some situations may require you to find an accountant to help with the preparation for filing.
A good qualified accountant will find you every single deduction that you are entitled to including those that you may not even be aware of. Situations like having an inheritance may cause great confusion and result in you paying more than you need to.
A good accountant understands the latest guidelines and qualifications for the deductions and can help to steer you through the multitude of questions and information that may result in a lower bill for you.
Finding a qualified accountant can be difficult. You may consider talking to friends and relatives who currently use an accountant to get feedback and recommendations to help you decide.
In addition, you will want to check their qualifications, the amount of time they’ve been providing accounting services, as well as checking with other clients that you do not know personally when possible.
Check with the Better Business Bureau to see if there have been any complaints or problems with the accountant you are considering and check their registration with the Chamber of Commerce. This will help you choose a qualified accountant who is familiar and well schooled.