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

With the filing deadline for 2011 federal income tax returns coming up on April 17, 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.

She said the American Opportunity Credit is a $2,500 credit per student (a family may have more than one eligible member). It gives a credit of 100 percent of the first $2,000 of eligible expenses and 25 percent for the next $2,000 in expenses. The credit is 40 percent refundable. To be eligible the student must:

• Be enrolled in a program that leads to a degree, certificate or other recognized educational credential.
• Students must take at least half of the normal full-time work load for the student's course of study for at least one academic period beginning during the tax year.
• Student must be free of any felony conviction.
• Student must not have completed the first four years of post-secondary education at an eligible educational institution.
• The credit can only be claimed for 4 years for any one student.

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.

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 re-sold 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 reduction in taxable income),” 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.

If you can claim a parent, you may be able to take the $3,700 exemption for the parent.

Unemployment Voids Earned Income Tax Credit

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

Wood works out of the H&R Block at 48576 Van Dyke Avenue, in Shelby Township.

Search for tax offices in Macomb Township in Patch's business directory.

NOTE: This article was corrected on Wednesday, April 11, at 5:40 p.m. This article was corrected on Thursday, April 12, at 9:50 a.m. to clarify information about the American Opportunity Credit.