April has arrived and along with it the looming deadline to file your 2012 taxes. If you’re like many Americans, you may be scrambling to find last minute ways to lower your tax bill.
With two weeks remaining to file your return, here are 5 last-minute ways to lower your tax bill!
1. Gifts to Charity
If you donated money to a non-profit last year, your charity may be deductible and can help lower your tax bill.
In order to claim these donations, keep in mind the following tips:
- Keep a record of the contribution (bank/credit card statement or cancelled check)
- Retain a receipt from the organization if the donation exceeded $250
- Find out the tax-deduction eligibility of the organization. The IRS provides a handy search tool of eligible organizations and their tax status.
2. Interest You Paid
If you’re a homeowner, your mortgage interest may be deductible and could help you lower your tax bill. Find out if you qualify today!
3. Job Expenses
Were you one of the millions in the United States looking for a job in 2012? If so, money you paid towards finding a job may be deductible.
In order to qualify for these deductions, you must have spent 2% of your annual gross income on your job search. For example, if you make $30,000 per year, you would have needed to spend $600 in your employment hunt.
If you did exceed this 2%, there are a number of items you can claim including:
- Professional Memberships
- Journal Subscriptions
- Uniforms (and laundering costs)
- Preparation and mailing of resumes
- Travel costs to and from the area of your search/interview
4. Sales Tax
For some, deducting the sales tax paid on purchases during the year may prove beneficial. If you are considering claiming your sales tax, there are several factors to take into consideration before doing so:
- Do you itemize? In order to deduct local and state sales tax, you must itemize when you file your return.
- Will deducting state and local sales tax provide a great break than by claiming state and local income tax? You can determine which will give you the highest return with the IRS Sales Tax Deduction Calculator.
- Are sales taxes the only deductions you plan to take? If so, it may not be worth your while as you may be able to receive more exemptions by claiming your income tax.
- If you choose to deduct sales tax, there is no limit to the amount you can claim as long as you have the proper documentation.
If you meet the necessary requirements, deducting your sales tax could help you lower your tax bill!
5. Medical and Dental Expenses
If you paid out of pocket medical expenses during the tax year, these may be deductible. To be eligible for these deductions, you must have spent 7.5% of your adjusted gross income for the year. For example, if your salary is $30,000 you would need to have paid $2,250 in medical expenses for the year before you can tax advantage of the deductions.
If you meet this requirement, there are a host of Medical and Dental expenses that are considered deductible, including:
- Annual Physical Examination
- Car (modifications for car for use of person with disability)
- Contact Lenses, Glasses, Eye Exam
- Hearing Aids
- Insurance Premiums
- Laboratory Fees
- Long-Term Care
- Nursing Home
- Special Education Services
- Stop-Smoking Programs
- Weight-Loss Program
Note: "If you pay medical expenses by check, the day you mail or deliver the check generally is the date of payment. If you use a "pay-by-phone" or "online" account to pay your medical expenses, the date reported on the statement of the financial institution showing when payment was made is the date of payment. If you use a credit card, include medical expenses you charge to your credit card in the year the charge is made, not when you actually pay the amount charged."
To find out if Medical or Dental expenses you paid in the tax year are deductible, the IRS provides a detailed list of what you can and can’t claim. Be sure to keep a record of the money you spent on health care expenditures to ensure they count towards helping you lower your tax bill!
For further reading, Kiplinger offers 71 more ways to lower your tax bill now and for next year!
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