Tax tips — and pitfalls to avoid — from an expert

WASHINGTON — Financial expert Ellen Stark, of Money magazine, recently detailed for CBS News some strategies for dealing with tax time, as well as some common mistakes people make.

Patrick McAnaney
DEDUCTIONS Americans are giving more to charitable organizations than ever, Stark says, and you can take those contributions off your taxes, as long as you follow a few rules: The organization must be a qualified charity, and if you’re claiming a contribution of $250 or more, you need a receipt, a bank record or (in the case of a donation by text) a phone record. And you can deduct more than just the checks you write, Stark said. Clothes and household items in good condition can be donated up to their resale value (estimate what it would reasonably sell for). If you buy something at a charity auction, you can deduct whatever you paid that’s above the fair market value. And if you volunteer, you can deduct those costs, such as supplies, mileage and parking. Working parents may be able to take a tax break for child care expenses, even day camp. Job seekers may be able to deduct expenses such as resume printing and interview travel. If your job required you to move in 2016, your expenses may be deductible. Making your house more energy-efficient could put you in line for a $500 deduction. (AP Photo/Carolyn Kaster) (AP)
This Tuesday, Jan. 10, 2017, photo shows a 1040 tax form, in New York. (AP Photo/Mark Lennihan)
AVOID ERRORS You’ll get your refund a lot faster, Stark said, if you avoid making mistakes on your return. Stark said a few to watch out for include: -Making sure the return has the correct Social Security number for everyone mentioned on the return; also, make sure the names on the forms match the names on people’s Social Security cards exactly. -If you’re using electronic deposit for your refund, make sure you’ve put down the right routing number. -If you’re filing a joint return, make sure both you and your spouse sign. -Check your math — and while you’re at it, check the income you’ve listed on your return against the total given on your W2s and 1099s; the IRS certainly will. Stark said people who make $64,000 or less can use the tax preparation software on FreeFile, available on the IRS website. Those who make more can use free tax forms you can find and fill out online — if nothing else, the math will be correct. Check your returns against your W2s and 1099s — the IRS certainly will. (AP Photo/Mark Lennihan)
In this Sunday June 12, 2016 photo, Dartmouth College President, Philip Hanlon, center, poses with Honorary Degree recipients, and members of the Board of Trustees before graduation ceremonies in Hanover, N.H. The college has come under fire from students who are angry over the lack of faculty diversity after an Asian-American assistant professor of English was denied tenure. (AP Photo/Jim Cole)
EDUCATION COSTS Education doesn’t come cheap, but you can often take some of that cost off your taxes. Stark explained that there are three main ways to do that — the American Opportunity Credit, the Lifetime Learning Credit and the tuition tax deduction. The American Opportunity Credit is the most valuable, and credits in general save you more money on taxes: They cut your actual tax bill, while deductions simply reduce your taxable income — not as dramatic a change. On the other hand, if your child is getting need-based financial aid, a tuition deduction brings down your adjusted gross income, which may put you in line for more need-based aid next year. All of these deductions and credits have income limits, and you can only take one per student per year. It’s not just for college students, either — if you took a class to improve your job skills, you could be in line for the lifetime learning credit, which can run up to $2,000. (AP Photo/Jim Cole) (AP)
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STILL HOPE FOR 2016 It’s 2017, but it’s not too late to reduce your 2016 tax bill. Up until the filing deadline, you can still put $5,500 in your IRA –$6,500 if you’re over 55 — and have it count for 2016. If you meet the income requirements, you can deduct the contribution. If you have a high-deductible health insurance plan, you can still top off your health savings account for 2016. Contributions are tax-deductible, and so is the money you spend from it on medical expenses. (Thinkstock) (Getty Images/iStockphoto/Nik01ay)
FILE - In this Oct. 6, 2015, file photo, the HealthCare.gov website, where people can buy health insurance, is displayed on a laptop screen in Washington. About 9 in 10 Americans now have health insurance, more than at any time in history. But progress is incomplete, and the future far from certain. Rising costs could bedevil the next occupant of the White House. Millions of people previously shut out have been covered by President Barack Obama’s health care law. No one can be denied coverage anymore because of a pre-existing condition. But “Obamacare” remains divisive, and premiums for next year are rising sharply in many communities. (AP Photo/Andrew Harnik, File)
AFFORDABLE CARE ACT PAPERWORK They’re talking about repealing the Affordable Care Act on Capitol Hill, but the law is still in effect, and was for all of 2016, and that could show up on your taxes. If you signed up through an online exchange such as healthcare.gov, you’ll be getting a copy of Form 1095A, and you’ll need that for the tax credit that can offset your insurance costs. Otherwise, insurer or employer will send a Form 1095B or 1095C, which details your insurance coverage (or the coverage you were offered and declined). You may not get it until March, Stark said, but you can file without one: The IRS wasn’t going to process tax returns without information about health coverage, but they recently said they wouldn’t reject returns without the information this year. (Still, Stark said, health insurance is the law.) (AP Photo/Andrew Harnik, File) (AP)
Alicia Utley
FREE TAX SOFTWARE If you’re filing your taxes yourself, you probably won’t have to pay to use do-it-yourself software. The IRS’ FreeFile program lets you file online for free, using software from tax preparers including H&R Block and others — and this year you can do it all on your smartphone or tablet with the IRS To Go app. Some free programs will file your state taxes for free too, but some won’t. You can also file for an extension for free at the IRS website. (AP Photo/Brennan Linsley) (AP Photo/Brennan Linsley)
Consider your financial decision carefully. (Getty Images/Fuse/Fuse)
PICK A TAX PRO While it’s gotten easier than ever to file your own taxes, most people still hire a pro to do it for them. Stark had a few pieces of advice: -Make sure you’re dealing with a CPA or an enrolled agent. They can file your taxes and represent you in front of the IRS if there’s a problem. Other tax preparers can fill out your return, but after that you’re on your own. -All preparers must have an ID number — you can check at the IRS website. -Check references, and watch out for anyone boasting that they always get high refunds — it’s all about what you put in. -The national average for a professional to file a simple return is $176, Stark said; with a Schedule A and a state return, the average goes to $273. And get organized — of course, the more of a pile of papers you show up with, the more you’re going to get charged. (Getty Images/Fuse/Fuse) (Getty Images/Fuse/Fuse)
A calendar from 1942 is posted in a replica kitchen Friday, Nov. 6, 2015, at The Easton Home in Easton, Pa. Nursing homes and assisted living facilities are increasingly using sight, sound and other sensory cues to stimulate memory in people with Alzheimer's disease and other forms of dementia. (AP Photo/Matt Rourke)
FILING DEADLINE Are you sweating out the April 15 deadline for filing? Well, you shouldn’t — it’s April 18 this year. April 15 is a Saturday this year, which would push the deadline back to April 17, but in D.C., that’s Emancipation Day in D.C., which affects tax deadlines nationwide. If that’s not enough time, you can file an extension by using Form 4868, available on IRS.gov. (Your state may require a separate form.) That’ll buy you another six months as far as filing, but if you don’t pay what you owe by April 18, you’re still going to be on the hook for interest and late fees. If you’re thinking of not filing in time because you haven’t got the money you’re going to owe, you can apply for an online payment agreement to spread out the bill. (AP Photo/Matt Rourke) (AP)
FILE - In this April 13, 2014 file photo, the Internal Revenue Service Headquarters (IRS) building is seen in Washington. Unscrupulous tax preparers are using President Barack Obama’s health care law as a ploy to pocket bogus fines from unsuspecting taxpayers, including some immigrants not bound by the law’s requirements, the IRS warned Friday, March 13, 2015. (AP Photo/J. David Ake, File)
TAX SCAMS Tax time is when the scammers start coming out of the woodwork, Stark said. The most common scam that starts around now is identity theft and false filing — someone gets a hold of your Social Security number, birth date and other information, files a return in your name and gets your refund. If you complain to the IRS, you’ll get your money eventually, Stark said, but it’ll take a long time and it’s a hassle. The easiest way to beat this scam is to file early, before anyone else tries it. And don’t give out any personal information in phone calls or emails purporting to be from the IRS. Relatedly, people for years now have been reporting phone calls and/or emails purportedly from the IRS threatening to bring the police to their house instantly unless they divulge their personal or financial information, or even buy a prepaid debit card to pay off some imagined debt. In either case, Stark said, the thing to remember is the same — the IRS will never, ever, use anything but letters to make a first contact. (AP Photo/J. David Ake, File) (AP)
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Patrick McAnaney
This Tuesday, Jan. 10, 2017, photo shows a 1040 tax form, in New York. (AP Photo/Mark Lennihan)
In this Sunday June 12, 2016 photo, Dartmouth College President, Philip Hanlon, center, poses with Honorary Degree recipients, and members of the Board of Trustees before graduation ceremonies in Hanover, N.H. The college has come under fire from students who are angry over the lack of faculty diversity after an Asian-American assistant professor of English was denied tenure. (AP Photo/Jim Cole)
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FILE - In this Oct. 6, 2015, file photo, the HealthCare.gov website, where people can buy health insurance, is displayed on a laptop screen in Washington. About 9 in 10 Americans now have health insurance, more than at any time in history. But progress is incomplete, and the future far from certain. Rising costs could bedevil the next occupant of the White House. Millions of people previously shut out have been covered by President Barack Obama’s health care law. No one can be denied coverage anymore because of a pre-existing condition. But “Obamacare” remains divisive, and premiums for next year are rising sharply in many communities. (AP Photo/Andrew Harnik, File)
Alicia Utley
Consider your financial decision carefully. (Getty Images/Fuse/Fuse)
A calendar from 1942 is posted in a replica kitchen Friday, Nov. 6, 2015, at The Easton Home in Easton, Pa. Nursing homes and assisted living facilities are increasingly using sight, sound and other sensory cues to stimulate memory in people with Alzheimer's disease and other forms of dementia. (AP Photo/Matt Rourke)
FILE - In this April 13, 2014 file photo, the Internal Revenue Service Headquarters (IRS) building is seen in Washington. Unscrupulous tax preparers are using President Barack Obama’s health care law as a ploy to pocket bogus fines from unsuspecting taxpayers, including some immigrants not bound by the law’s requirements, the IRS warned Friday, March 13, 2015. (AP Photo/J. David Ake, File)


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