Tax tips to save you money
Updated On: Dec 24 2012 10:46:15 PM CST
The end of the year is quickly approaching and now is the time to make sure you're taking advantage of every tax break and that you've got all the receipts you need. Local 2 Consumer Expert Amy Davis has advice on getting ready for tax season.
Now is the time to make those charitable contributions, add a little to your investment accounts and take care of year-end health care expenses. All of it could help you maximize your 2012 return.
Even the smallest charitable contribution during the holiday season can make a difference come April 15.
CPA Jennifer Harris says, "Part of the itemized deductions are your charitable contributions. They contribute to that number, so there is no minimum amount. Even if you contribute $5 to a charitable organization, it could potentially bump you up over the standard deduction and help you on your tax return."
Make sure you don't miss any deductions. Mike McManus hired a professional to make sure he got the deductions he deserved.
"Having a CPA do my taxes has saved me hours and probably thousands of dollars in taxes," McManus said.
If you're going to hire a tax professional, Angie Hicks from Angie's List says ideally it should be a long-lasting relationship. Try to stick with the same person year after year.
"Hiring a professional can actually help you take some deductions you didn't even know you were eligible for," Hicks said.
Schedule an appointment whenever there's a major life change. And come prepared.
"The tax code is very complicated, long and scary and it's a professional's job to make sure you feel confident about what you are deducting. You need to make sure you have the right documentation before you take a deduction. Never estimate or guess based on last year or prior-year numbers. Specifically for 2012, make sure that if you are issued a 1099 or receiving a 1099, you do it correctly. The IRS is really cracking down on 1099 miscellaneous income."
You should also know if your tax attorney or CPA is able to help you in case of an audit.
"Not all professionals can. It's a really important question," Hicks warned.
When hiring a professional, check the person's credentials. CPA'S, tax attorneys and agents have education and testing requirements. Ask for an estimate on the fees so you know up front what you're paying for. And beware of preparers who claim they can get you larger refunds than someone else.
Angie's List collects reports on tax preparers and accountants. You can read reviews as part of your research when hiring.