by Jaynee Sasso
Unemployment has reached record numbers and many are left with the challenge of figuring out creative ways to increase their cash flow during these turbulent economic times. This tax season you can be sure to give your personal economy a boost by being organized and informed about the tax credits and refunds that you qualify for. Knowing what questions to ask your tax preparer is very important in taking advantage of tax credits such as the Earned Income Tax Credit (EITC).
A recent press release by the Department of Social Services reported that Virginia could see more than $1 billion per year in federal EITC money if everyone who qualified took advantage of the credit. Unfortunately, up to 22 percent of qualifying Virginia households do not take advantage of the tax credit, which leaves many of the working poor and middle class families with fewer resources to ease the burden of today’s economic crisis.
I recently spoke to Theresa Newton of Tee Tax Services in Richmond. Theresa specializes in business taxes and payroll services. She offered some great tips for saving time and ensuring that you don’t leave any money on the table this tax season and she mentioned a few tax credits that you may qualify for:
EITC – If you have worked in the past year, including self-employment, and have earned less than $41,646 (if married and filing jointly) with more than one qualifying child, you may be eligible.
Recovery Rebate Credit – Those who did not qualify for the stimulus rebate check in 2007 but who qualify in 2008 may be eligible for Recovery Rebate Credit.
First Time Homebuyer Credit – You may qualify for a tax rebate of up to $7,500 if you purchased a home after April 2008 and before June 2009.
The key to taking advantage of these tax credits is to be informed and to communicate effectively with your tax professional. Being organized and having all the necessary documentation available for your tax preparer will also decrease your frustration and chances of error in determining your eligibility for various credits and refunds.
Please note that the IRS is cracking down on abuse and fraud. This is especially true with claiming children on tax returns. According to Theresa, you must have and present to your tax professional the social security cards and birth certificates of your children. If you are not the custodial parent, then it is required that form 8332 (Claim of Exemption) be completed and signed by the custodial parent, who has made the decision not to take the deduction. Theresa also stressed the importance of having available the necessary forms and receipts for your tax preparer, such as receipts for Charitable Contributions, 1098 forms for your mortgage interest, tuition payments and interest, receipts for both personal property and real estate taxes and childcare receipts, etc. Getting organized before your appointment with your tax preparer will help ensure that returns are prepared accurately and filed within a reasonable amount of time. That translates into more money in your pocket.
To ask a question of Theresa Newton, call 745-9444 or email firstname.lastname@example.org.