NEW YORK – Tax season will soon be upon us, and the advisers at Jackson Hewitt Tax Service have a few tips to reduce your stress level.
First, don't trust that your employer will accurately report your earnings in the W-2 it issues. When you receive your W-2, check it against your pay stubs and, as soon as possible, rectify discrepancies with your payroll department. Employers are required to provide W-2 forms by Jan. 31.
Next, consider filing your taxes electronically. The Internal Revenue Service estimates that 68 million taxpayers filed electronically last year out of approximately 150 million people who received W-2's. Jackson Hewitt says e-filers typically received their refunds in half the time it took paper filers to get theirs.
If you happen to owe the government money, electronic filing allows you more time to set up a payment plan with the IRS.
Anyone who suffered property loss or damage from Hurricane Katrina is eligible for various new — or newly liberalized — tax deductions. The IRS has, for example, removed limits on what victims can claim as lost, damaged or stolen items and property. Also, anyone with debts that are cancelled because of the storm, such as the mortgage on a destroyed home, does not have to claim them as income.
The kindhearted souls who provided shelter for displaced families can deduct up to $500 per person whom they helped, up to a maximum of $2,000.
And people who make investments that aid the environment can enjoy certain new benefits. Example: You can get tax credits for investing in energy-saving devices, such as weather-proofing materials, for your home.
Get all the stories you need-to-know from the most powerful name in news delivered first thing every morning to your inbox