It's Tax Time! Do you need to file?

It's tax season and whether you have a simple return or one that requires a lot of aspirin, you need to be prepared! Starting out at the beginning of each year with a filing system (that you feel works) will save you hours of stress and not to mention the threat of an audit.  I will cover some simple techniques to put in place to make your life a lot easier.

Even if you don’t have to file for 2012, here are six reasons why you may want to:

1. Federal Income Tax Withheld You should file to get money back if your employer withheld federal income tax from your pay, you made estimated tax payments, or had a prior year overpayment applied to this year’s tax.
   
   
2. Earned Income Tax Credit You may qualify for EITC if you worked, but did not earn a lot of money. EITC is a refundable tax credit; which means you could qualify for a tax refund. To get the credit you must file a return and claim it.
   
   
3. Additional Child Tax Credit This refundable credit may be available if you have at least one qualifying child and you did not get the full amount of the Child Tax Credit.
   
   
4. American Opportunity Credit Students in their first four years of postsecondary education may qualify for as much as $2,500 through this credit. Forty percent of the credit is refundable so even those who owe no tax can get up to $1,000 of the credit as cash back for each eligible student.
   
   
5. Adoption Credit You may be able to claim a refundable tax credit for qualified expenses you paid to adopt an eligible child.
   
   
6. Health Coverage Tax Credit  Certain individuals who are receiving Trade Adjustment Assistance, Reemployment Trade Adjustment Assistance, Alternative Trade Adjustment Assistance or pension benefit payments from the Pension Benefit Guaranty Corporation, may be eligible for a 2012 Health Coverage Tax Credit.

I will begin to cover organizing techniques in my next chapter.