For most U.S. taxpayers the automatic six-month extension to file tax returns expires on October 15, 2013 (other than the military and individuals serving in combat zones, or people from regions affected by storms, flooding and landslides). The Internal Revenue Service (IRS) urges taxpayers who requested for the automatic extension to re-check their returns for certain overlooked tax benefits.
With the deadline approaching, AG Tax has summarized some often-overlooked tax benefits/deductions provided by the IRS, along with the filing and payment options before October 15, 2013.
Earned Income Tax Credit (EITC)
EITC is a refundable federal income tax credit for certain qualifying low to moderate income working individuals and families. AG tax recommends taxpayers take a moment to see if they qualify for this credit before submitting their returns.
Itemized Medical Expenses
A taxpayer can deduct unreimbursed medical and dental expenses that exceed 7.5% of their adjusted gross income (AGI).
Saver’s Credit for Low and Moderate-income workers
The IRS offers a tax credit, to certain taxpayers who contributed to qualified retirement plans, such as: traditional IRAs, Roth IRAs, 401(k) plans, 403(b) plans and 457 plans, Simple IRA, Thrifts Saving Plan (TSP), etc.).
Education Tax Credits and Deductions (details)
There are various credits, such as: American Opportunity Tax Credit and/or the Lifetime Learning Credit (LLC) for taxpayers to claim as education expenses if they are within certain AGI threshold limits. Deductions can also be claimed for tuition and education fees and work-related education.
Legal Same-sex couples recognized for federal tax purposes
Same sex couples legally married in jurisdictions that recognize their marriages are now treated as married couple, irrespective of where they live. Thus, legally married same-sex taxpayers must file either as married filing jointly or separately tax returns after September 16, 2013.
Fresh Start for Struggling Taxpayers
If a taxpayer is facing monetary issues to pay their tax dues, he/she may consider the various payment options (details) provided by the IRS. Due to the past financial crisis, the IRS also launched various programs, such as: ‘Fresh Start Initiative’ and ‘Offer in Compromise’, which may be beneficial in case the taxpayer is facing financial difficulties or facing problems making payments to the IRS. The IRS urges taxpayers to even pay partially if possible, to avoid the late-filing penalty, which would apply to any unpaid balance. AG Tax recommends that a taxpayer consult their tax advisor regarding a payment plan that best suits their need.
AG Tax LLP Can Help
Don’t let the approaching filing deadline create a stressful situation. If you have any tax-related queries, need assistance with tax planning or filing your tax returns please contact us. Our team comprises of highly experienced tax professionals with extensive knowledge of U.S. and Canadian tax laws as well as cross-border compliance.
Furthermore, as a full service accounting firm, AG Tax associates are dedicated to assist you with even your most complex tax needs.
We can assist with:
- Canadian Personal and corporate tax returns
- Cross Border Taxation and Business Planning
- U.S. Personal and Corporate Taxation
- Disclosure of Foreign Assets and other information filings
- Retirement planning
- Estate Planning, Inheritance tax advice
To obtain a quote or to arrange for a consultation to discuss your tax related queries, please contact us at:
- 416-238-5920 (Greater Toronto Area, ON)
- 604-538-8735 (Greater Vancouver Area, BC)
- 780-702-2732 (Greater Edmonton Area, AB)
Disclaimer: The information in this publication is accurate as of the time of its publication. AG Tax assumes no responsibility for changes to tax legislation subsequent to the publication of this document. The information provided is for general information purposes only and should not be acted upon without seeking professional advice. If you would like to engage our services, please contact our staff and obtain authorization to send our firm confidential information. A client relationship is not created by the transmission of information. A client relationship is only formed with our firm when a scope and engagement letter signed by the firm and the potential client detailing the terms of engagement is present.