Tips for Saving Your Hard-Earned Money on Tax Day

With tax day just around the corner, it’s important that all Ohioans know what they can do to save themselves and their families money. Every tax cut, every way to save a dollar earned means groceries, gas money, and more money pumped into the local economy.

But in 2010, more than 32,000 Ohioans did not file tax returns, leaving an estimated $26 million in unclaimed refunds on the table. In fact, the median refund is $561, more than an entire month’s worth of food for a family of four. Tax refunds that weren’t claimed in 2010 or any later year can still be claimed up to April 15th, 2013, but after that 2010 tax refunds that should have gone to thousands of Ohioans will be erased.

Hardworking families should not overpay their taxes by hundreds or thousands of dollars just because they’re unaware of critical tax credits and deductions. 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 at www.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, canceled checks, W2, and 1099 forms. 
  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 (VITA) site where volunteers help more middle-class and low-income Ohioans claim vital tax credits by offering specialized assistance to individuals who otherwise can’t afford it. These volunteers do not charge for their services.  My new legislation, the Volunteer Income Tax Assistance Act of 2013 (VITA) would help keep these VITA sites operating. To find a VITA near you, call 1-800-906-9887.
  3. File for the Child Tax Credit or the EITC if you’re eligible. VITA volunteers can help you claim all tax credits that you should receive. The Child Tax Credit provides hard-working families with $1,000 worth of tax relief for each child under age 17. And working Ohioans – individuals and families who earned up to $50,270 in 2012– may also be eligible for the Earned Income Tax Credit (EITC). The EITC was established in order to reduce the disproportionate tax burden on working Americans. Named by President Reagan as “the best antipoverty, the best pro-family, the best job creation measure to come out of Congress,” EITC continues to have considerable bipartisan support. It provides tax refunds to low- and moderate-income workers and their families. Last year, working Ohioans lost out on an average of more than $2,100 by failing to take advantage of the EITC.
  4. File for the American Opportunity Tax Credit (AOTC). Eligible taxpayers – parents and students who are paying part of the cost of the first four years of college – may qualify for the maximum annual deduction of $2,500 per student or a credit of up to $1,000. Created through the Recovery Act to provide middle class tax credits during tax years 2009 and 2010, the AOTC improved existing credits to help make college more affordable for middle class families. Taxpayers can receive a tax credit for money spent on tuition, fees, and course materials paid in the taxable year. In Ohio, nearly 350,000 families will save an average of $2,100. And, up to 40 percent of the AOTC is refundable – meaning that families get money back through a tax refund even if they have no tax liability. Despite this, it is estimated that more than 346,000 eligible Ohio families failed to file for this tax credit. With clear benefits for the middle-class and for our economy, I hope to increase the number of families in 2013 that take advantage of it.
  5. Be Aware of All Information on Tax Credits, Free Filing, and Preparation Services. In order to assist with this, I’ve launched a new website that provides this information in one easy-to-access location. By visiting www.brown.senate.gov/services/tax-tips , it is my hope that every Ohioan will be alerted to free tax preparation services available, and critical—but often unclaimed—tax credits.

Ohioans work hard every day and deserve every opportunity to save their hard-earned money. Let’s move forward with our economic recovery and ensure that Ohioans have the resources needed to support their families. By utilizing the tax cuts that bolster middle class families and offer support to Ohio families who need it most, we can continue to make our country stronger.