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Last-Minute Tax Tips: How to Chose the Right Form to File


Tax formsWith just a week to go before April 17, it's crunch time for getting your taxes filed. If you're just now getting started, the first question you have to answer is which form you should use to file.

The EZ Way to File

The simplest IRS tax form is 1040EZ. Either single or joint filers can use Form 1040EZ if they don't claim any dependents, have less than $100,000 in taxable income, and don't have any complicated tax issues like income adjustments due to IRAs or household employment taxes. You can claim the Earned Income Credit, but if you have other credits, then this is the wrong form for you. Similarly, you can earn up to $1,500 in interest income, but if you earn more interest than that or have other types of investment income such as dividends, then you can't use Form 1040EZ. You also can't itemize deductions on Form 1040EZ, so if you'd benefit from itemizing, you'll need to use Form 1040. Find out more about whether you can use Form 1040EZ on pages 5 and 6 of this PDF.

Going to Plan A

If Form 1040EZ doesn't work for you, Form 1040A is the middle-ground choice. Easier than a full 1040, Form 1040A lets you include income from dividends, capital gains, pensions, and unemployment compensation, among other sources. On the deduction side, you can write off IRA contributions, student loan interest, tuition and fees, or educator expenses.

You still can't earn more than $100,000 in taxable income, but you can claim more credits, including the popular Child and Dependent Care Tax Credit and various education credits. But if you're self-employed, received income from a partnership, or have certain complicated types of income or expenses, then the only way to file correctly is on Form 1040. Get all the details about using Form 1040A on page 11 of this PDF.

The Standard Form 1040: Don't Get Discouraged

Even if you have to file on Form 1040, you shouldn't feel intimidated. Most people won't need to fill out anywhere near every line on the 1040. Moreover, by giving you more chances to save, Form 1040 may not only be the best choice for your filing, but it may also get you the biggest refund. That's reason enough to celebrate as time runs out on the 2011-2012 tax season.

NEXT: Tax Apps For Filers On The Go

For more on taxes:

Motley Fool contributor Dan Caplinger is fortunate enough to have gotten his taxes done a little early this year. You can follow him on Twitter here.

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Cities with the Lowest Tax Rates

The total amount of tax you pay reaches far beyond what you owe the federal government. Depending on where you live, most likely you're required to pay additional taxes, including property and sales tax. The disparity between the amount of tax you pay in a low-tax city and that in a high-tax city can be dramatic. Living in any of these 10 cities could save you a bundle, although the exact amount may fluctuate based on your income and lifestyle choices.

Cities with the Highest Tax Rates

Much ado is made in the press about federal tax brackets, but cities can carry a tax bite of their own. Even if you live in a state that has no income tax, your city may levy a variety of taxes that could eat away the entire benefit of living in an income tax-free state, including property taxes, sales taxes and auto taxes. Consider all the costs before you move to one of these cities, and understand that rates may change based on your family's income level.

Great Ways to Get Charitable Tax Deductions

Generally, when you give money to a charity, you can use the amount of that donation as a deduction on your tax return. However, not all charities qualify as tax-deductible organizations. While there are many types of charities, they must all meet certain criteria to be classified by the IRS as tax-deductible organizations. There are legitimate tax-deductible organizations in many popular categories, such as those listed below.

A Freelancer's Guide to Taxes

Freelancing certainly has its benefits, but it can result in a few complications come tax time. The Internal Revenue Service considers freelancers to be self-employed, so if you earn income as a freelancer you must file your taxes as a business owner. While you can take additional deductions if you are self-employed, you'll also face additional taxes in the form of the self-employment tax. Here are things to consider as a freelancer when filing your taxes.

Tax Deductions for Voluntary Interest Payments on Student Loans

Most taxpayers who pay interest on student loans can take a tax deduction for the expense ? and you can do this regardless of whether you itemize tax deductions on your return. The rules for claiming the deduction are the same whether the interest payments were required or voluntary.

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What if your only income is Social Security? My only possible deduction would be interest on my mortgage.

April 10 2012 at 1:46 PM Report abuse rate up rate down Reply

Flat tax now!

April 10 2012 at 1:35 PM Report abuse +1 rate up rate down Reply

anyone know if the fuel usage tax we pay at the gas pump and on the heating oil to the house is deductable ? It is another tax that is paid on goods consumed.

April 10 2012 at 10:18 AM Report abuse rate up rate down Reply

Schedule B not D

April 10 2012 at 9:12 AM Report abuse rate up rate down Reply

mande mis tax ase como un mes los mande el dia 5 de marzo no etenido respuesta

April 10 2012 at 1:10 AM Report abuse rate up rate down Reply