A fter a long debate in Washington, we passed bipartisan legislation that will ensure that no American receives a tax increase this year. And starting with your first paycheck in 2011, you’ll likely notice that your paycheck is a little larger, thanks to the payroll tax cut signed into law last year.
For example, according to estimates by the U.S. Treasury Department: a married couple living in Wilmington, with one spouse earning $28,000 and the other earning $24,500 would receive about $1,050.
The average American worker can expect to see $695 extra in take-home pay. But fighting for lower tax rates is only half the battle. With tax season approaching, here are some practical tips to help you maximize your returns and take advantage of new tax incentives. 1. File early and electronically. The longer you wait to file your tax return, the longer Uncle Sam holds on to your money. A list of trusted, free electronic filing options can be found at your local IRS office or on the web atwww.irs.gov/efile. This is a painless way to file and you can even sign electronically. Make sure you have all your paperwork – including receipts and canceled checks – so you can get started once your W2 and 1099 forms arrive.
2 Use volunteer tax preparation sites. If you do not have Internet access, don’t worry. You can also visit your nearest Volunteer Income Tax Assistance or VITA site where volunteers can help low-income, elderly, and other residents navigate the system and prepare taxes. These volunteers do not charge for their services. To find a VITA near you, call 1-800-906-9887.
3 Study new tax incentives for 2010 returns. Tax incentives are available for first time homebuyers, people who have purchased new vehicles (including motor homes), college students, people who have made energy efficiency home improvements, and taxpayers who have purchased some computer technology equipment.
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