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Tips for Filing Your Taxes

It’s that time again and the tax deadline will be here before we know it! If you haven’t filed your 2012 taxes yet, you’re in abundant company. The IRS says that a full 20 percent of taxpayers don’t file their taxes until the week before the deadline. If you’re in this group, get a move on—you may be surprised to know that there are still a few ways to maximize your tax return.

· Take your time, do it right. Waiting until the last minute can lead to mistakes – but mistakes can slow down the processing of your return (which means you have to wait longer for your refund). Be sure to double-check all of your numbers and calculations on your return, since these are the most common errors made by taxpayers.

· Remember to ask your tax preparer if you are eligible for the Earned Income Tax Credit (EITC) worth a maximum of $6,044. Millions of eligible families don’t claim this valuable credit year. In fact, one in five people who could claim the credit don’t because they do not know about it or because they don’t file their taxes. If you qualify to claim Earned Income Tax Credit (EITC) on your federal income tax return, you also may be eligible for a similar credit on your state or local income tax return. New York City offers its residents an earned income tax credit, as do twenty-two states, the District of Columbia and Montgomery County, Maryland.

· Max your IRA contribution. Contributing to a traditional IRA is one of the best ways to really reduce your 2012 taxable income before April 15th. You have until the very last day to contribute and deduct the amount from your taxable income. The contribution limit for 2012 is $5,000 if you’re 49 or younger and $6,000 if you’re 50 or older.

· File for free. Taxpayers whose adjusted gross income was $57,000 or less in 2012 can use free tax preparation software from approximately 15 companies. And if you made more than $57,000, no worries—you’re not out of luck. You can still electronically file for free through the IRS website.

And if you are getting a refund, consider using it to start saving. “Tax season is a good opportunity to plan for the future, especially if you anticipate receiving a refund. When individuals learn how to save, budget and build their assets, they can become more financially independent and direct more money back into the local economy,” said, Mariadele Priest, director of Community Development Banking at Capital One Bank. “Being thorough in the tax preparation process is critical to ensuring low to middle income families can take advantage of important credits, such as Earned Income Tax Credit (EITC), that can jumpstart a long-term savings plan.”

on behalf of Capital One

Tracy Scott is a self-professed baking addict and foodie who lives in Chesterfield County with her husband and two kids. She managed the calendar and handled social media for RFM before moving on to the corporate world.

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