I Need help with tax, I'm married, wife do not work, 2 kids-4 & 3 years, and I have a house and 2 cars.?

Question

Please tell me everything I can use to maximize my returns.
Also tell me for which deductibles I have to provide documentation and for those no documentation is needed. This is the first time I'm doing tax myself and I'm using TURBO TAX. I will really APPRECIATE any SUGGESTIONS.

More info, I live in CA, and work for a corporation. No student loans. I'm paying both fed and state tax.

Answer 1

If you do not have proof for every line-item on your tax return you can be assessed additional tax, interest and penalties. As already observed, the IRS are going to be really hot on charitable contributions, given the recent change in law.

You have not given us too much information to go on. If you have a mortgage and pay property taxes you may be able to itemize. If you pay taxes on your car based on value, don't forget to deduct that (remember not to deduct any part of the tax that is a flat rate charge). Other itemized deductions include state taxes paid, medical expenses and charitable contributions. If your state does not have income tax, make sure to take the sales tax deduction. See Pub. 600 for details, downloadable from www.irs.gov.

As your wife does not work, you will not qualify for any childcare expenses, unless she is a student or disabled.

You have a choice of filing status - married filing separately or married filing jointly. As your wife does not work, it will almost certainly be joint.

Are you self-employed? If so, remember you can take health insurance on the front of the return, giving you a deduction for the full expense, rather than limiting it to the excess of 7.5% of AGI on Schedule A.

Are you paying off student loans? Do you need to take courses to maintain professional or trade qualifications? If you take those courses at degree-granting institutions you may be able to take a credit against your tax bill.

If your adjusted gross income is less than $50,000 and you make voluntary contributions to a retirement plan, you will also get a small credit against your tax bill.

Finally, always run a check to ensure the software is correct. I found two errors (omissions to be precise) in the one I used this year. It would have cost me $1,650 if I hadn't spotted them. Fortunately, I work for a CPA and prepare taxes for a living so I was able to spot the errors quite easily.

Answer 2

Don't forget to take the phone tax credit this year. It is $60 in your pocket for a four-person household.

Answer 3

Do You Work? How do you get paid? Are you on a W-2 or 1099 basis?