H&R Block Tax Pro Shares Last-Minute Tips for 2011 Returns

With the filing deadline for 2011 federal income tax returns upon us – April 17 this year – Patch asked H&R Block tax professional Rachelle Wood to share a few last-minute tips and commonly overlooked credits:

Education

“The most common (mistakes) I see are the education credits,” Wood said. “People aren’t aware of what’s out there or they take the wrong one for their situation.”

There are different credits that can be applied for students in secondary education, undergraduate or graduate programs, and even depending on the number of years a student has been in college.

Wood recommends the American Opportunity Credit, which can be claimed by a parent if their student is listed as a dependent on their tax form, or a student who is filing their taxes independently.

With this credit, which was extended this year, taxpayers can claim $2,500 for the first four years of college education for each student. The tuition and fees deduction was also extended and could provide a reduction in taxable income of up to $4,000, even for those who have not graduated from high school or do not have a GED.

Charitable Donations

One thing that has changed in terms of writing off charitable donations is that the IRS now requires a receipt for every donation, no matter the denomination.

While the government may not ever ask to see the receipt, Wood said, “I strongly encourage clients to get a receipt for everything. You need to be able to go back into your records and show it.”

Donated clothing and household items in condition good enough to be resold at a thrift store are likely eligible deductions, according to H&R Block. However, regardless of the case, you must have proof to note it on your tax return. This can include cancelled checks, a receipt from the charity, or a credit card record.

Sandwich Generation: Caring for Children and Aging Parents

“If your parents move in with you and you are providing more than half of their support, there is an opportunity (for a tax credit),” Wood said. However, you must be able to show that you are providing more than half of their support, above and beyond what is covered by their social security or pension.

This credit can be up to $3,650.

Unemployment Voids Earned Income Tax Credit

Wood said another common misconception relates to the earned income tax credit. Taxpayers who earned less than $48,362 last year can claim this credit. However, unemployment insurance does not count as earned income, making those collecting such insurance ineligible for this credit.

But all hope is not lost. Some job search expenses may be deducted. Among these expenses are resumé development, professional placement services, and unreimbursed mileage, airfare and hotel expenses for interview travel, according to H&R Block.

Words of Wisdom

"I always tell my clients, 'Anything that changes in your life – someone coming into the family, a change in job – all of these have effects on your tax return,'" Wood said. "My office is open year round, and I encourage clients to talk all year round and not get blindsided at the last minute."

Wood also advises clients to keep copies of their tax returns and supporting documents for a minimum of three years.

And for those already looking ahead to next year's taxes, Wood said you should set a mid-February deadline to allow time to request copies of receipts and employment forms you may not have received. 

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