By Jackson Holtz Herald Writer
Even though Tax Day still is a couple of months away, now is the time to start getting organized to pay Uncle Sam.
Everyone gets a two-day extension this year. Federal taxes are due April 17 because April 15, the usual deadline, falls on a Sunday and the nation’s capital observes Emancipation Day on April 16.
Just because there’s a bit more time, that doesn’t mean you should delay or procrastinate.
Start reviewing the past year to look for opportunities for tax savings, experts say.
Each year, more than $1 billion is forfeited to the government, not because anybody has violated rules but because people don’t claim all the deductions to which they are entitled, said Kathy Pickering, executive direction of The Tax Institute at H&R Block, a nationwide tax-preparing company.
Other common mistakes include filing under the wrong marital status, forgetting to file and missing tax credits, she said.
“Marriage, divorce, having a child, even going back to college, these life changes can bring about tax savings,” Pickering said. “Every year, taxpayers are leaving money on the table by not claiming all of the credits and deductions to which they are entitled.”
These life changes, including marriage, divorce, a new job, starting a small business or retiring from a career can affect tax decisions and tax planning.
“Maybe this is the tax season you should start working with a trusted professional, your local CPA,” suggested a press release from the Washington Society of Certified Public Accountants. They offer a free “Find a CPA” service on their website, www.wscpa.org.
The online tool allows people to narrow a search for an accountant based on the service they need and their location.
There also are options for help for people with limited incomes.
The Snohomish County United Way offers tax-preparation clinics to people with household incomes of $50,000 or less. A complete list is at www.uwsc.org/freetaxpreparationcampaign.php.
Jackson Holtz: 425-339-3447; firstname.lastname@example.org.
Education credit: The American Opportunity Credit, extended through 2012, allows you to claim $2,500 for each of the first four years of college for each student. You can reduce taxable income of up to $4,000, at least through the end of this tax year.
The Lifetime Learning Credit is worth up to $2,000 per return for post-secondary degree programs. The two credits cannot be combined, so choose the best one. Remember that interest on student loans also is deductible.
New cost-basis rules: Cost basis is used to calculate capital gains on stocks and other securities. Beginning for tax year 2011, the IRS now requires brokers to report the cost basis in addition to sale information of stocks and securities. Keep all tax documents mailed by brokerage companies. These important papers should provide information required when completing returns.
Energy credits: Eligible home improvements may count toward an energy-efficiency tax credits, but the maximum lifetime credit is now $500, not $1,500 as it used to be. If you already claimed a credit of $500 in a previous year, you can’t file for any more money back.
Hybrid vehicles credit expired: The meter has run out on tax credits for hybrid vehicles, but plug-in electric drive vehicles, including the Chevy Volt and Nissan Leaf, qualify for a credit, as do using car share vehicles, such as Zipcar, and the purchase of conversion kits.
Adoption credit is fully refundable: The Adoption Credit can be claimed for qualified expenses up to $13,360 for 2011. The IRS will refund any amount of the credit that exceeds the adoptive parents’ tax liability.
Source: H&R Block
H&R Block: hrblock.com.
Find a CPA: The Washington Society of Certified Public Accountants, www.wscpa.org.
United Way: For households earning $50,000 or less, the United Way offers clinics with trained volunteers. Clinics this year run through April 14 at the following locations:
Everett Goodwill’s South Everett Job Training and Education Center
228 SW Everett Mall Way, Everett Tuesdays and Thursdays, 5:30 to 8:30 p.m. Saturdays, 10 a.m. to 3 p.m.
North Middle School
2514 Rainier Ave., Everett Tuesdays and Thursdays, 5 to 8 p.m. Saturdays, 10 a.m. to 3 p.m.
South Everett Foursquare Church/Children’s Village
14 E. Casino Road, Suite D, Everett Tuesdays, 3 to 7 p.m. Wednesdays and Thursdays, 9 a.m. to 1 p.m. Fridays, noon to 4 p.m.
Cedar Valley Community School
19200 56th Ave. W., Lynnwood Tuesdays and Thursdays, 5 to 8 p.m. Saturdays, 10 a.m. to 3 p.m.
Marysville Totem Middle School
1605 Seventh St. NE, Marysville Tuesdays and Thursdays, 5 to 8 p.m. Saturdays, 10 a.m. to 3 p.m.
Frank Wagner Elementary 115 Dickinson Road, Monroe Tuesdays and Thursdays, 5 to 8 p.m. Saturdays, 10 a.m. to 3 p.m.