Time running out to save money on 2012 taxes - KTEN.com - No One Gets You Closer

Time running out to save money on 2012 taxes


DENISON -- Filing your taxes is probably the last thing you want to think about during the holiday season, but tax experts say you should if you want to pay less to Uncle Sam.

There is still time left to donate to a charitable organization.

Contributions are tax deductible, but Denison Tax preparer Mary Walker says, make sure you ask for a receipt.

"Most of the time, there's a $300 level they will give you a receipt on unless you have some type of car or vehicle," Walker said.

If you happen to be in the final stages of buying a home, experts suggest you try to close by December 31 to avoid a 3.8% tax set to go into effect January 1.

Walker also says homeowners that have had construction done on their home this year may be at an increased risk for an audit.

"If you paid over $600 to an individual that was doing contract labor, you need to be giving them a 1099 miscellaneous," she said. "The IRS is really trying to get people who do contract work in the loop because some people try to go out there and get cash and are not paying their income taxes."

Don't forget the child tax credit. You may be able to reduce your income tax by up to $1,000 for each child under age 17.

If working ahead to save money isn't in the cards this year, Walker says the best thing you can do to prepare for tax season is organize your receipts.

"Get your stuff together and get ready to see your tax preparer," she said.

Tax preparation fees are tax deductible, too.

Parents and students can also receive up to $2,500 tax credit by paying for college expenses through the American Opportunity Tax Credit. Check to see if you are eligible.