Top 5 Tax Mistakes That Cost You Money
April 8, 2010— -- I reported this morning on "Good Morning America" about Washington Post financial reporter Ylan Mui and the difficulty she encountered while trying to complete her 2009 taxes.
For those of you who still need to complete your taxes to make the April 15 deadline, here are some tips that will help you avoid costly mistakes.
The Making Work Pay Credit is a $400 credit that workers received in 2009 in the form of lower withholdings from their paychecks. You already have the money, but you have to fill out a Schedule M in order to keep it.
The Earned Income Tax Credit is a $3,000 to $5,000 credit for people with low incomes. Many people don't realize that you can apply for it even if you use one of the simpler tax forms for people who do not itemize.
Many people are out of work right now, so don't forget that expenses like copying your resume, postage to send it off and driving or flying to job interviews are deductible.
Many people don't realize that "rapid refunds" do not come from the IRS -- they are loans from tax preparation companies and can cost you as much as 30 percent in interest. So on a $1,500 refund you would pay $450 in interest.
Normally when you use a credit card the merchant pays an interchange fee of about 2.5 percent. But the IRS refuses to pay that fee, so therefore you have to.
On a $5,000 tax bill the fee would be about $122.
For additional tips on how to save money on your taxes CLICK HERE. Or for last-minute tax questions CLICK HERE.
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