April 15 is right around the corner, and that means it is time
to pay what our government says we owe. For the most part, there
havenít been any sweeping changes in the federal tax codeóat
least not yetóso the process should be fairly standard this
Still, personal and business accountants are full of tax tips this time of year to make filing less worrisome. One good tip: Donít fall for the refund-anticipation loans offered by tax preparers who have teamed up with banks to loan you the amount of the return while you wait for the IRS check. These days, with even the IRS heavily promoting electronic filing and direct deposit, taking out a loan to get your refund only a few days earlier seems pretty silly.
According to the Tax Foundation, most Americans work until mid-April before they have earned enough money to pay off their total tax bill for the year. Itís called Tax Freedom Day, and the good news is that is has been coming earlier and earlier over the last couple of years.
2. Deduction choice. The IRS will allow you to choose as a deduction either the sales taxes you paid or your state income tax. Itís especially great news to those who live in states with no income tax.
3. Mileage. The answer to the question everybody asks: If you use your car for business, the reimbursement rate is 27.5 cents a mile. If you own a clean-fuel vehicle, the deduction is $2,000.
4. Be careful with donations. If you itemize and made a cash donation to a qualified charityósuch as tsunami reliefóbefore January 31, you can count that in your return. But donít get too carried away. People have been abusive when it comes to claiming cash donations and the IRS is taking note.
5. Electronic filing. If you think youíre getting money back, this is the way to go. Not only does your return get to the IRS in seconds, but if you also opt for direct deposit, you could get your refund in as little as a week.