The Money Coach
  • About
    • Meet Lynnette
    • Media Kit
  • Get Help
    • Money Coach University™
    • Books
    • Financial Coaching
    • Speaking
    • The Money Coach Recommends™
  • Contact
  • Building Wealth
  • Investing
  • Credit Scores
  • Student Loans
  • Paying for College
  • Saving Money
  • Real Estate
  • Credit Card Debt
No Result
View All Result
The Money Coach
  • About
    • Meet Lynnette
    • Media Kit
  • Get Help
    • Money Coach University™
    • Books
    • Financial Coaching
    • Speaking
    • The Money Coach Recommends™
  • Contact
No Result
View All Result
The Money Coach
No Result
View All Result

Four Strategies to Lower Your Tax Bill

Lynnette Khalfani-Cox, The Money Coach by Lynnette Khalfani-Cox, The Money Coach
in Taxes
Reading Time: 2 mins read
Four Strategies to Lower Your Tax Bill
8
SHARES
134
VIEWS
Share on FacebookShare on Twitter

The April 17th, 2012 tax filing deadline is just a few weeks away. Fortunately, there are some last-minute ways you can still save money.

Here are four strategies to lower your tax bill:

1. Itemize – Don’t Take the Standard Deduction 

People who procrastinate and wait until the last moment to file their taxes often take the standard deduction rather than itemizing their deductions. But that’s a big mistake. Many times itemizing your deductions can save you hundreds or perhaps thousands of dollars. Or it may even get you back a big refund check.

The IRS says the average refund check is nearly $3,000. That’s money a lot of people really need. According Capital One Bank, which just came out with their annual Taxes and Savings Survey, one-third of all Americans plan to spend some or all of their refund checks. Most people will spend on everyday expenses and things like groceries. So itemizing could get you a larger refund and help you pay your monthly bills.

2. Contribute to an Individual Retirement Account 

One way to lower your tax bill is to contribute to a retirement account. Unlike with charitable deductions, which had to have been made by December 31st, you can still contribute to an IRA up until the tax-filing deadline, and have it count toward your 2011 taxes. That will lower you taxes and save what you might owe to Uncle Sam.

You can contribute up to $5,000 to an IRA if you’re under 50. If you’re 50 or older, you can contribute $6,000 to an IRA. A person in the 25% tax bracket who puts $5,000 in an IRA will save $1,250 in taxes.

3. File Online for Free

Paying someone to prepare your taxes can cost anywhere from about $50 to a few hundred dollars, on average. And of course, the more complicated your returns the and the more forms you need filled out, the more expensive it is. Some people pay thousands of dollars in tax prep fees.

But instead of paying a CPA or a tax preparation company, if you earned $57,000 or less in 2011 you can use the Free File brand-name software from the IRS and get free tax preparation and free e-filing. The IRS says that in 2011 alone, almost 100 million taxpayers filed their taxes online, using IRS e-file.

Free File is available only through IRS.gov, where a number of tax software companies make their products available at no cost. Some also support state tax returns for free.

But even if you make more than $57,000, anyone can use the IRS’s online Fillable Forms,  which are an electronic version of the IRS paper forms. This is a good option for do-it-yourselfers who fill out their own taxes.

4. File on time or Request an Extension 

Some people don’t file their taxes on time – and they also don’t bother to request an extension. This is a big no – no that can cost you money. If you fail to file by the tax deadline, the IRS imposes “failure to file” penalties on top of interest for any taxes you don’t pay on time. That fine can be as much as 25% of your unpaid taxes.

So if for whatever reason you can’t file by April 17th, do yourself a favor and save money by getting an extension and avoid that hefty “failure to pay” penalty.

Tags: ExtensionIRAstandard deduction
Previous Post

How To Avoid Mystery Shopper or Secret Shopper Scams

Next Post

Do I Have To Pay an Old Debt That Is Past The Statute of Limitations?

Related Articles

A Student’s Guide To Filing Taxes
Personal Finance

Breaking Down the ‘Penalties’ of Single Tax Filings

by Lynnette Khalfani-Cox, The Money Coach
tax refund
Personal Finance

Making the Most of Your Tax Refund

by Lynnette Khalfani-Cox, The Money Coach
Car tax break tips
Taxes

Skip the Luxury Car and Other Vehicle Tax Break Tips

by Guest Blogger
uber and lyft
Taxes

Tax Pros and Cons for Uber and Lyft Drivers

by Guest Blogger
GOP Tax Plan Hurts The Middle Class
Taxes

5 Horrible Things About the GOP Tax Plan

by Lynnette Khalfani-Cox, The Money Coach
estimated quarterly taxes
Taxes

Warning: IRS Partners With Debt Collection Companies

by Lynnette Khalfani-Cox, The Money Coach
tax lien
Taxes

How to Get a Tax Lien Removed From Your Credit Report

by Lynnette Khalfani-Cox, The Money Coach
Taxes

6 Easy Steps to Set Up an Installment Agreement with the IRS

by Lynnette Khalfani-Cox, The Money Coach
IRS-offer-in-compromise
Taxes

IRS Offer in Compromise Explained

by Lynnette Khalfani-Cox, The Money Coach
Next Post
Do I Have To Pay an Old Debt That Is Past The Statute of Limitations?

Do I Have To Pay an Old Debt That Is Past The Statute of Limitations?

About

Lynnette Khalfani-Cox, The Money Coach®, is a personal finance expert, speaker, and author of 15 money-management books, including the New York Times bestseller Zero Debt: The Ultimate Guide to Financial Freedom.

Lynnette has been seen on more than 1,000 TV segments nationwide, including television appearances on Oprah, Dr. Phil, The Dr. Oz Show, The Steve Harvey Show, Good Morning America, The TODAY Show and many more.

Quick Links

  • Money Coach University
  • Lynnette's Personal Site
  • The Money Coach Corporate Site
  • Video Portfolio
  • Privacy Policy

All information on this blog is for educational purposes only. Lynnette Khalfani-Cox, The Money Coach, is not a certified financial planner, registered investment adviser, or attorney. If you need specialty financial, investment or legal advice, please consult the appropriate professional. Advertising Disclosure: This site may accept advertising, affiliate payments or other forms of compensation from companies mentioned in articles. This compensation may impact how and where products and companies appear on this site. AskTheMoneyCoach™ and Lynnette Khalfani-Cox, The Money Coach® are trademarks of TheMoneyCoach.net, LLC.

©2009-2022 TheMoneyCoach.net, LLC. All Rights Reserved.

No Result
View All Result
  • Meet Lynnette
  • Money Coach University™
  • Books
  • Financial Coaching
  • Speaking
  • The Money Coach Recommends™
  • Media Kit
  • Contact

©2009-2021 TheMoneyCoach.net, LLC. All Rights Reserved.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Add New Playlist