This year the Easter bunny has some competition. It’s also crunch time for those who have yet to file their taxes.
Fortunately, tax returns aren’t due this year until Tuesday because of a holiday in Washington, D.C. And remember, if you don’t owe, you don’t need to adhere to the April 18 deadline.
But for those who need to pay Uncle Sam, it’s time to put the pedal to the metal. Help abounds in person (except on Easter Sunday) and online. Otherwise, here are seven things to know about your taxes, whether you have filed yet or not:
Where’s my refund? Tax software giant TurboTax recently released the most common questions asked by its millions of software users. At the top was finding the status of a refund. This one’s easy. The IRS has a quick online path at www.IRS.gov/refunds. Check within 24 hours of e-filing with your Social Security number, filing status and the exact amount of your refund. Last year, around 75 percent of taxpayers received a tax refund, with the average near $2,800. For many, that’s the largest paycheck of the year. Expect a refund within 21 days for those who e-file with direct deposit.
Can I claim my relative, boyfriend or dog as a dependent? Regarding humans, the answer is maybe, said Lisa Greene-Lewis, a CPA and tax expert with TurboTax. In addition to relatives you support — who may or may not be living in your house — you may also be able to claim a live-in boyfriend, girlfriend, domestic partner or even a friend, giving you a tax deduction of up to $4,050 this year per dependent. Like relatives, you must pay more than half of their costs through the year. But unlike relatives, these live-in non-relatives must have earned less than $4,050 in taxable income.
Unfortunately, Fido or Mr. Whiskers can’t be dededucted, Greene-Lewis said. But if you have a business and your cat provides pest control, or your guard dog is there for protection, you may be able to deduct some of their care expenses. Just make sure they’re reasonable, she said.
Does working in the “on-demand, self-employment” economy change my taxes? Yes. As a freelancer, the IRS allows you to take business deductions you would not be eligible for solely as a W-2 employee. Deductions can include startup costs, computers, vehicle expenses and a portion of your utilities, rent, mortgage interest, property taxes, depreciation and even cleaning costs based on the square footage of your home used for your business.
Most-missed tax deductions and credits. According to TurboTax, here are the most overlooked among more than 350 deductions and credits that are available:
▪ Education expenses. Costs for higher education are deductible for students enrolled in school at least half-time, but causal learners can also get a tax credit.
▪ Moving expenses. These expenses are tax deductible if you change jobs and the distance from your old residence to your new job site is at least 50 miles more than to your old job site, and you work at least 39 weeks during the year after the move.
▪ Points paid on your home loan. When you bought your home, any mortgage points you paid are deductible in that year, Greene-Lewis said. Points paid to refinance a loan must be written off over the length of the loan. If you refinance again, you can write off the remaining points from the first re-fi in the year you refinanced.
▪ Mileage. If you use your vehicle for business, whether you are self-employed or an employee, you can deduct your mileage at 54 cents per mile for 2016. If you work more than one job, the cost of traveling between job locations is tax deductible as well, Greene-Lewis said.
Free local help. There are still a number of ways to get free help filing your taxes. They include:
▪ AARP Tax Aid Program: AARP has numerous sites in Texas located in public libraries and senior citizen centers where trained and certified volunteers provide tax preparation and electronic filing for anyone, regardless of age or income. Call 211 to find a location or go online at www.aarp.org and search for the Tax-Aide Site Locator. Appointments are recommended.
▪ Volunteer Income Tax Assistance Centers: VITA sites are for those with income of $54,000 or less. Fifteen sites are open Saturday, five sites are open Monday, 14 sites are open Tuesday. Five sites will remain open until April 30. Call 211 or go to www.mymoneydfw.com.
▪ Free File: The IRS offers this free tax software program for incomes below $64,000. Go to www.IRS.gov to access the program.
What if I can’t pay what I owe? Taxpayers often qualify for one of several payment options. For those who owe $50,000 or less, online payment agreements can be set up to make monthly payments for up to 72 months at www.irs.gov/individuals/online-payment-agreement-application. Those who are struggling financially may qualify for an offer-in-compromise. To see if you qualify, go to the online tool at https://irs.treasury.gov/oic_pre_qualifier/.
Collection agencies coming for back taxes. The IRS announced recently it is hiring four collection agencies to go after thousands who owe back taxes. If you aren’t sure if you owe money, you can check at www.irs.gov/balancedue. Remember, neither the IRS nor one of these collection agencies will call and demand payment over the phone, so don’t fall for that scam. The IRS and the debt collectors will both mail letters before they call. The private collectors also cannot file a levy or lien on your property for back taxes, only IRS employees can do this.
And don’t forget to sign your tax filing and use the correct Social Security numbers. The IRS says these are common mistakes every year.
Teresa McUsic’s column appears Saturdays. TMcUsic@SavvyConsumer.net