Money Saving Tips For Taxes

If you want money saving, one area you might be considering saving in is taxes. There are many potential reasons you could get a tax break. Therefore, before filing, make sure you look into them. Here are 4 categories that might qualify:

Job search

First of all, if you switched jobs, started a business, or conducted a job search, you could qualify. You can claim the job search expenses, such as making resume copies, placement agency costs and attending seminars for careers. If you had moving costs related to your new job, this could be tax deductible. The tax moves deduction just depends on how far you moved, and how long you spent. To qualify for any of these, the job search expenses must have been at least 2% or more of the gross income for the year.

Home office

A lot of business owners are working from home today. If you use a portion of your house just for business and consistently for business, meet with clients in your house, or have a business portion of the house separate from the main home, you could qualify.

Dependents

If you had a baby, sent someone to a university, or put kids in daycare this year, you could qualify for deductions. Also, you can get deductions for every dependent you have.

Education credits

The American government gives tax credits and deductions to encourage more people to go to college. Therefore, if you, your spouse or your kids attended college this year, it could qualify for a tax credit.

What cannot qualify

The first $2400 you made from unemployment used to be tax free. However, this is no longer the case, as this provision ended as of 2010. This year, you have to pay taxes on all the unemployment benefits you might have gotten.

Conclusion

When it comes to money saving, tax deductions are one of the best ways to save. Just evaluate your situation and see which you qualify for.

Pay Your Taxes On Unemployment Insurance Benefits

When filing your 2012 taxes, make sure you pay taxes on your unemployment insurance benefits.

While the rate of unemployment may be reducing, there are still millions of people who are unemployed. Sadly, these individuals also have to pay taxes on their unemployment insurance benefits.

If you are unemployed and you collected unemployment insurance benefits last year, you must pay taxes on it. After calculating your tax incidence, you will be surprised at the amount of tax you owe the government, unless you requested the federal government to withhold taxes.

The VP of TurboTax, Bob Meighan says that people still think that unemployment benefits are not taxable. While that might have been the case in 2009, congress reviewed that provision.

However, when filing your returns, you will find yourself in the lowest tax bracket because of your low income. In fact, you might also find yourself qualifying for several tax breaks.

Terry Lemons, I.R.S. spokesman says the agency encourages taxpayers to take advantage of things like earned income credit when they lose their jobs.

He also said that the agency encourages individuals to file their returns even if they do not have the money to pay their taxes. In such cases, taxpayers can benefit from installment agreements to pay their taxes.

Many households in the U.S are still recovering from the Great Recession of 2007 – 2009. According to government statistics, more than 13 million who are not employed have stopped looking for jobs because companies have not yet started recruiting new workers.

Fortunately, those who spent the better part of 2011 can get tax breaks on 2012 taxes.