5 tips to maximize your tax refund
April 05, 2012
By Amanda Ponzar
For a few years now, I've been working on a partnership with the Walmart Foundation, United Way, One Economy and the National Disability Institute's Real Economic Impact Tour. The partnership offers eligible tax payers free online tax filing through MyFreeTaxes.com plus free, in-person tax preparation services through volunteer tax assistance sites across the country.
To help raise awareness, in recent years, we've really played up social media (@MyFreeTaxes, @Live_United & @unitedway) as part of the integrated marketing plan that includes everything from press releases to TV & radio. And we're seeing a 40% increase in filers!
Here are the details from this year. Since April 17, the last day to file taxes, is around the corner, here are five ways to maximize your refund, or minimize your payment, if you owe taxes.
1. Get all the tax credits and deductions that you deserve. You may be due money back even if you don't owe any taxes. One in five Americans fail to claim the Earned Income Tax Credit (EITC) each year. Calculate your EITC benefits by visiting http://bit.ly/mytaxbackapp. For a helpful list of tax credits and deductions that you may be eligible for visit http://bit.ly/taxcreditlist.
2. Skip paying the tax preparer and file online or onsite, in-person for free. You'll have to gather all relevant documents and receipts whether you do your taxes yourself or pay a preparer. If you earned below $57,000 in 2011, use MyFreeTaxes.com to file both your federal and state taxes. MyFreeTaxes.com provides easy-to-follow directions and saves your work at every step. If you earned less than $50,000 in 2011, you can take advantage of free, in-person Volunteer Income Tax Assistance (VITA) sites through United Way in more than 100 communities nationwide. Enter your zip code on www.myfreetaxes.com to locate the nearest free filing center.
3. Avoid late payment penalties. If you owe taxes, you're probably waiting till the last minute. This is when you're much more likely to make a mistake and may miss out on your highest possible deductions. With only 2 weeks left, prepare your documents now. Check out MyFreeTaxes.com for a handy checklist to help get your taxes in order.
4. Keep your receipts. In particular, those having to do with your vehicle (gas, parking, repairs, auto registration), medical expenses, charity donations, and business expenses, especially if you are self-employed or have incomes outside your full time job. These expenses may reduce your self-employment income, which means you pay less in taxes.
5. Save your refund for rainy days. Your refund is not a gift from the IRS -- it is part of what you earned. Use it wisely. Get your refund directly deposited into your savings account or use it to order paper bonds. One in four people in the US are unbanked or underbanked and savings bonds can make an ideal refund option. Series I Savings Bonds have a current 3.06% rate that's better than most savings accounts.
Good luck!
Find out more at http://www.unitedway.org/FreeTaxPrep or feel free to join the conversation using #EITC or #FreeTaxes. (More on social media in the next few posts – as we’re counting down 25 tweets for 25 years of winners @Live_United or @unitedway #SpiritofAmerica; plus, I’m fascinated by what American Express is doing linking social media to sales! Let's hear it for ROI.)
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