1. Make back-to-school shopping pay your family back: Tips to track costs and get more money back at tax time

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    Did you know many school supply purchases qualify for tax savings? If you have a child in grades kindergarten (K) through 12, holding on to receipts for education could really pay you back. The K-12 Education Credit and Subtraction can increase your refund up to $1,000 by helping reimburse the costs related to education.  You may not have heard about this program or how useful it is to save receipts to claim this credit. It can really make a difference, especially when your budget is tight.  We want to help your family get the most from this valuable credit. Our guide below will help you find out if you can claim it and gives some helpful tips on easy ways to save your receipts. If you paid qualifying education expenses for your qualifying child in grades kindergarten through grade 12, and saved your itemized receipts, you may be able to claim the Minnesota K-12 Education Credit.             Are you eligible? To claim the credit, you must have a qualifying child in grades K through 12. Your household income must be below $37,500 for families with one to two children. The income limit increases by $2,000 with each additional child beyond two. (Example: The income limit for a family with four qualifying children is $41,500.) What is the maximum credit? For tax year 2018, the maximum K-12 Education Credit amount is $1,000 per child. The credit amount is up to 75% of qualifying expenses. What expenses qualify? Paper, […]
  2. Get money back at tax time when you save your receipts!

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    Minnesota parents who keep their back-to-school shopping receipts can get more at tax time when they claim the Minnesota K-12 Education Credit on their return. Take it from Tameya who has a son and received 75 cents back on every dollar she spent on school supplies in 2013. For Tameya, saving her receipts went a long way. Last April, her father underwent a triple bypass surgery, suffered a major stroke, and was left paralyzed on the left side of his body. Living on her own income to support her and her son, Tameya lost her job while caring for her father and mother. Tameya felt a great deal of relief when she learned that she qualified for Prepare + Prosper’s free tax preparation services where a volunteer assisted her in claiming tax credits like the K-12 Education Credit. Here’s what you need to know to claim the K-12 Education Credit: You may claim this credit on your Minnesota income tax return for up to 75% of qualifying educational expenses which you can see below. There is a maximum household income limit: Qualifying Children Household Income Limit 1-2 $37,500 3 $39,500 4 $41,500 5 $43,500 6 or more $43,500 plus $2,000 for each additional child   Save your receipts! To claim the credit save your receives for when it’s time to file taxes and keep them somewhere you can remember to find for tax season. You must prove you paid the expenses showing each item. The credit amount is up to 75% […]
  3. Half million households in MN to expect increased property tax refunds this year. Will yours be one?

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    According to 2013 Tax Bill Improves Property Tax Refunds for Renters and Homeowners, the 2013 tax bill increases maximum refunds and lowers the threshold for qualifying for a property tax refund. The result: More than 79,000 renting households will see an average $152 increase in their Renters’ Credit refunds. More than 309,000 homeowning households will receive an average $221 increase in their refunds. Another 30,000 renting households and 112,000 homeowning households are now eligible for a property tax refund From the Minnesota Budget Bites blog. In other words, if you usually get a property tax refund, you might see a modest increase in your refund. If you didn’t qualify for a property tax refund last year, you should look at the qualification guidelines this year as you might be newly eligible. You can also talk with a tax preparation professional for more assistance.
  4. One tip that will save you 75% on back to school shopping

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    Parents, it’s back to school season again. As you plan how to make the most of your money here’s one tip that could help put some money back in your pocket. What’s the tip? It’s simple, really. Save your receipts. This small step may help you claim a sizable tax credit called the Minnesota K-12 Education Credit. How do you tell if you can claim it? Why, I thought you’d never ask! About the Minnesota K-12 Education Credit Like many tax credits, there is a maximum household income limit for the K-12 Education Credit, which is $37,500 for families with one or two children. The max income limit increases by $2,000 for each additional child. (Is your income too high for the credit? Check out the K-12 Education Subtraction.) If you meet the income requirements, you may claim a tax credit worth up to 75% of qualified educational expenses for your child in grades K-12. The most you can claim back is $1,000 for each child in grades K-12. How it works Let’s look at how the credit works with a typical back to school shopping list: Educational Expenses Cost Pencils, pens, erasers $12 Crayons, markers, highlighters $10 Notebooks, loose leaf paper, note cards $8 3-ring binders, folders $9 Scissors, glue, calculators $11 Gym clothing (as required by the school) $50 Home computer (up to $200 allowed to be claimed) $200 Total educational expenses $300 Total expenses multiplied by 75% $225 K-12 Education Credit amount: $225 In this example, a family spending $300 on […]
  5. Counterview: 3 Situations When You Should Request an Extension

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    Last week, we covered 3 reasons why it’s better to file on time before April 15, rather than request an extension from the IRS. This week, we’ll cover three situations where requesting an extension is a good idea. Situation #1: Your tax situation got more complicated than you thought Life changes and so can your tax situation. Perhaps you got married last year or had a divorce. Or maybe you declared bankruptcy, foreclosed on a home, and so on. Major life events like these could change how you file taxes, making it a good idea to file for an extension so that you have extra time to understand your tax situation. If an extension on your return means the different between a correct and incorrect tax return, then request an extension. Situation #2: Some of your tax documents are missing In a perfect world, all of your tax documents would march straight into your designated tax return folder, making it easy to stay organized when doing your taxes. Unfortunately, sometimes your tax documents can get lost or have a mistake. In cases where you need extra time to get your tax documents straightened out, requesting an extension can help. Situation #3: Something else becomes more pressing than filing by April 15 Sometimes we try our best to file on time, but life can throw you a curve ball and suddenly you have to attend to a personal emergency. In cases where your personal life has become overwhelming, requesting another six months to file […]
  6. 3 Reasons You Should File Taxes on Time (and Not Request an Extension)

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    April 15 is Tax Day. It’s the day by which the IRS requires those who owe taxes to file and pay taxes. It’s also well dreaded by every procrastinator during this time of year. While there is an option to request an extension to file by October 15, 2013, here are three good reasons why you shouldn’t. Reason #1: You pay interest on any owed taxes, even if you extend If you owe taxes to the IRS and file for an extension, the IRS will still calculate interest on your outstanding balance. That’s because a tax extension is meant to give you extra time to prepare a completely accurate tax return, but the IRS will not wait around to receive the taxes you owe. To avoid these penalties and interest payments, it’s best to pay in full as soon as you can, preferably by April 15. Reason #2: Filing as soon as possible protects you from identity theft If you’re due a refund and extend, you won’t have to worry about any late payment interest or penalties. But waiting to claim your refund could expose you to a rapidly growing problem: identity theft. According to the IRS, identity theft cases involving stolen Social Security numbers to collect other people’s tax refunds soared to 449,809 in 2012, up more than 80% from the previous year. Taxpayers usually don’t realize their identities have been stolen until they try to file and their return is rejected by the IRS. Bottom line: The longer you […]