Pulse

Tax tips to help save money and reduce pain

Two things in life are certain: death and taxes. While you can't do too much about death, you can reduce the pain and suffering of filing tax returns with a few easy steps offered by the Atlanta office of Consumer Credit Counseling Service.

"It's human nature to avoid filing taxes," said Gay Watson, communications director for Consumer Credit Counseling Service. "But by filing when you're not under the critical deadline of April 15, you're more apt to be more thorough and perhaps capture deductions you may have overlooked. The key is to file as early as you can. That way, you can avoid some of the costly mistakes most consumers make."

If you were organized at the beginning of 2005, you gathered your tax paperwork all year long. You set up folders to capture nonreimbursed employee expenses, including mileage, uniform costs, continuing education, professional memberships and subscriptions. As a health care professional, perhaps you worked independently in addition to your full-time job. Because they must be mailed to you by Jan. 31, you should have received your 1099 forms for this extra work, but have you itemized the expenses associated with extra jobs? They may be deductible.

"Being organized all year long can save you lots of time when it comes to filing," Watson said. "Believe it or not, someone
who has kept records throughout the year can fill out their tax return in just a few hours."

Here are some tips for making filing simpler:

  • Gather all your documentation - W2s, 1099s, receipts for possible deductions, mortgage interest and tax payments, and investment and student loan statements.
  • Double-check that the name and Social Security number on your tax forms match your Social Security card. If the name or number on the card is incorrect, call the Social Security Administration at 800-772-1213.
  • Round it off. It's easier to keep everything straight if you round off cents to the nearest whole dollar. Drop amounts less than 50 cents and increase amounts between 50 and 99 cents to the next whole dollar.
  • Do the math. Check and recheck your calculations. Have someone you trust check it.
  • Take credit for your job. Whether you're out of work or employed and looking, job-hunting expenses are deductible
    as miscellaneous itemized deductions. Keep receipts for resumes, postage, travel, lunches, etc.
  • Be charitable. Make sure you get receipts for cash contributions and for donating used items. Noncash contributions are deductible at wholesale fair market value.
  • File early. Avoid the mad rush on April 15. If you're using the U.S. Postal Service, send your form "return receipt requested." Write the receipt number on the top edge of your form before you seal it as proof the form was in the envelope.
    The IRS also accepts delivery by Airborne Express, DHL Worldwide Express, FedEx and UPS.
  • File electronically. E-filing is easy. Go to www.irs.gov and click on Electronic Services. Telephone help is available all hours at 1-800-829-1040 (TTY/TTD 1-800-829-4059). You also can check the current mileage allowances, contribution limits for retirement plans and answers to other questions.
  • Make a copy of your return for your files. Write your name and Social Security number on any accompanying materials,
    and attach them securely.
  • Seek help. If you are concerned about how you will pay your taxes or would like help budgeting so you will not be in the same position next year, contact CCCS at 1-800-251-2227 or www.cccsinc.org.

    "If you're running late, you can always file an extension with Form 4868 by April 15," Watson said. "Just remember, sooner or later, you'll have to file. The sooner you know whether you're paying or getting a refund, the better you can plan."

    - Do you have any story ideas for Pulse? We'd love to hear more about your career and what you do after hours. E-mail me at pulseeditor@ajc.com or call 404-526-2078.