Last-Minute Tax Filing Tips for 2011
April 6, 2011 — -- The April 18 tax filing deadline is fast approaching, and last-minute filers have questions.
Mellody Hobson, president of Ariel Investments and "Good Morning America's" personal finance contributor, appeared on "GMA" today with tips for viewers who wrote in to ask about their last-minute returns.
Q: I moved from Washington State to Chicago to start graduate school and I was working at the school collecting income for some jobs I was doing there. Do I pay tax on the work I was doing there to Washington or to Illinois?
A: Hobson said she believed many people misunderstand this specific issue. The answer is that people pay state income taxes to the state from which their income is paid, not to the state where they live. That means that people who work in more than one state must pay state income taxes in more than one state. And don't try to hide. If you received a W-2 form from your job, the state won't have any difficulty determining that you owe taxes, she said.
If the graduate student is paid by a school in Chicago, she would pay state income taxes to the state of Illinois, Hobson added.
Read Mellody's extra tax tips!
Q: Each year I give away items to Goodwill or to another charity -- places that will come to my house and pick things up then leave a receipt. It may be $100 here or there. Is it even worth it to submit them on my taxes?
A: First, remember that you can only deduct charitable contributions if you use itemized deductions, Hobson said. Whenever you donate clothing or household items you no longer use, it's worth it to get and keep the receipts, Hobson said. If you're ever audited, those receipts are evidence of the value of your donation, she said, adding that you must get a receipt if the item you donate is worth more than $250.
There is a limit on how much you can donate, she said. Charitable deductions may not exceed more than half your income. She cautioned people to make sure they donate to a qualified organization that is registered with the IRS. Such organizations include the Salvation Army, Goodwill, your church or your child's school. If you aren't sure about an organization's status, check on the IRS website.
