Photo by: Reggie Casagrande/Getty ImagesNavigating a Form 1040 often requires several hours, well-organized paperwork, and a few doses of aspirin. But thanks to recent changes in the law you may owe less or deserve a bigger refund than you think. Between the February stimulus and President Obama's foreclosure-prevention program, it's the rare taxpayer who will wind up empty-handed.
What to do with the money you've saved? Try this.
Here are some new incentives that may help you:
Making Work Pay Credit
The daily grind just got a little less taxing. During 2009 and 2010, the stimulus Making Work Pay Credit is $400 per worker or $800 for a married couple. Those who owe no tax can still claim the credit.
Ideally, you won't be working forever. Take these easy steps to be sure you can retire in style.
Going Green Credits
Did you make any adjustments to your home last year to bolster energy efficiency? The stimulus offers a credit for 30 percent of the purchase price for some improvements, up to $1,500 (note: there's no cap on solar and wind energy improvements) per tax return, regardless of your income. You can split the credit over several projects for 2009 and 2010, says Bradford Hall, a certified public accountant based in Irvine, CA. Visit energystar.gov to see which projects and products qualify for the credit.
Don't stop with the big stuff. Try these easy ways to green your home.
American Opportunity Credit
Parents and students writing tuition checks get extra help from the American Opportunity Credit. Claim it on your taxes, and you'll get back 100 percent of the first $2,000 paid for tuition, fees, books, and other materials for a college, university, or trade school student who attends at least half-time, plus 25 percent of the next $2,000, for a maximum credit of $2,500, explains Mackey McNeill, a certified public accountant and personal financial specialist in Covington, KY. Learn more at ed.gov.
College is going to cost how much?! Don't fret. Start saving with these tips.
Plus, don't forget to take these steps to save more money (and time):
E-file your return
Using tax software or a Web program eliminates common taxpayer mistakes, and some even point out tax deductions that you missed. Plus, submitting electronically usually means getting your refund faster.
Tackle paperwork pileups with this easy cheatsheet.
Give to causes
But keep all the necessary paperwork. Recent IRS guidelines require proof of every charitable donation. "Even as you're passing around the collection plate at church this year, think about documentation," says Mark Steber of the national tax preparation firm Jackson Hewitt. What works: a receipt, canceled check, or credit card statement.
Volunteering doesn't help with taxes, but you can still reap rewards. Find an opportunity that works for you.
Write off property taxes even if you don't itemize
For your 2008 and 2009 taxes, if you pay property taxes but can't itemize deductions, you can add up to $500 ($1,000 if you file jointly) to your standard deduction.
Make your mortgage disappear faster by adopting these practices.
FIND MORE WAYS TO SAVE ON YOUR TAXES.
Have some tips of your own? Please share.
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Reprinted with permission of Hearst Communications, Inc.