tax
Run Away from Debt Settlement
Debt settlement may seem like a good short-term solution to eliminating credit card debt.
However, beware of these facts:
1. It will lower you credit score (possibly by a few hundred points) and it could take years to build your credit back.
2. The IRS (Internal Revenue Service) considers the amount you have settled as income, so you will have to pay income tax on that amount.
Income Tax Deduction: Earned Income Credit
According to the IRS, the earned income credit (EIC) is a tax credit for certain people who work and have earned income under $41,646. A tax credit usually means more money in your pocket. It
reduces the amount of tax you owe. The EIC may also give you a refund.
To find out more information about the earned income credit, go to: http://www.irs.gov/pub/irs-pdf/p596.pdf.
Income Tax Refund Anticipation Check or Loan
Beware of Income Tax Refund Anticipation Checks or Loans.
Convenience comes with a price.
For example, the fine print of H&R Block’s Instant Money Refund Anticipation Loan reads: “Fees may apply”.
H&R Block’s State Refund Anticipation Check’s (RACs) fine print states: “State RACs are available in most states for $13″ and “Fees and additional terms and conditions apply.”
Income Tax Tip: Pay on Time
Pay your amount due to the IRS on time.
This will prevent you from having to pay unnecessary penalty fees AND interests.
TaxCut Software
TaxCut makes it much easier to file your income tax return, and costs less than hiring an accountant.
First, it calculates everything, so you do not have to do any math.
Second, it saves time.
Third, and most important, it makes it more difficult to overlook deductions, credits and tax breaks.
Finally, it includes free eFile for your federal tax return.
TurboTax Software
TurboTax makes it much easier to file your income tax return, and costs less than hiring an accountant.
First, it calculates everything, so you do not have to do any math.
Second, it saves time.
Third, and most important, it makes it more difficult to overlook deductions, credits and tax breaks.
Finally, it includes free eFile for your federal tax return.
Income Tax Deduction: Heloc Interest
Very similar to mortgage interest. Heloc (Home equity line of credit) interest is also to be included in “Itemized Deductions”.
Income Tax Deduction: Mortgage Interest
This is a big one! For most families owning a house, this will be the most important deduction to include in your “Itemized Deductions”.
Income Tax Deduction: Car Taxes
You can deduct the License Fee portion of the DMV’s Vehicle Registration fees under “Itemized Deductions”.
Income Tax Deduction: Property Taxes
You can deduct your property taxes (taxes paid to the county when you own a house) under “Itemized Deductions”.
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