This is sweet justice. You might have ever wondered if you were paying too much taxes. This is your chance to possibly claw some of the tax back from government.
Each year, the IRS complains about how much money taxpayers lose to Uncle Sam. The latest estimate is $1 billion. This is because of costly mistakes in filing returns. Every year, taxpayers repeat the same mistakes or make new ones.
Well, now through April 30, H&R Block (www.hrblock.com) is offering free “Second Look”Review of 2008-2010 income tax returns not completed initially by the huge tax preparation company. If the pros in participating offices find pay dirt, they will tell you. “recovered”100,000 in overlooked credits and deductionsThey’ll even help you file your IRS paperwork for a small fee during a recent Detroit roll-out.
“The idea is to help people get back their own money,” says Elaine Smith, master tax advisor at H&R Block. “No matter the amount, they could use the extra cash these days.”
The following are some of the most common mistakes made during Detroit’s Second Look.
* Missed education credits. The problem wasn’t simply that people didn’t know about the American Opportunity Credit ($2,500 for each four-year college education), the Lifetime Learning Credit (upto $2,000 per return for postsecondary degree programs), and the Tuition Fees Deduction (a reduction of taxable income up to $4,000). In the case of 24-year-old Russell Gismonde, for instance, the part-time student and restaurant manager wound up $1,135 richer after H&R Block figured out he was personally better off claiming the Hope Credit than the Lifetime Credit he’d originally checked. You can only choose one of these.
“My plan is to have my own business someday,”Gismonde, a grateful Gismonde who has always done his own taxes, said that he was very happy. “Every penny helps.”
* Inaccurate filing status. Don’t be silly. Understanding the financial implications “married filing jointly”vs. “married filing separate,”It’s not a Detroit-only problem, however. Switching from one to another meant that one family would get a $5498 refund.
* Overlooked Earned Income Tax Credit. Although it is intended to encourage employment among low-income earners and provide incentives for them to do so, not everyone knows they could be eligible for thousands of dollars in credits.
This year’s filing deadline is April 17, so it might make sense to review past returns before committing to repeating past mistakes. The review can be done online via the Block Live video conference tool if it is easier.
