When Amanda Foss of Benton City filed her taxes last year, she missed out on more than $1,000 in savings.
Foss, who is attending Columbia Basin College and the University of Phoenix to earn a nursing degree, said she didn't realize she could get education credits.
This week, she filed her taxes through Jackson Hewitt Tax Service in Kennewick and said she will receive a refund $1,500 larger than she did for 2010 taxes because of tax credits she wasn't aware she qualified for when she filed online using TurboTax.
That makes it well worth the $200 preparation fee, Foss said.
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It's common for people to make errors on their tax returns when preparing them on their own, said Barbara Culver, owner of Kennewick's Tax Center Plus.
One frequent mistake is not taking into account income limits or expense thresholds for tax credits or deductions, she said. While expenses related to medical care and jobs can be deducted in an itemized tax return, the amount must reach a certain level.
Tax software like that used with free online filing on the Internal Revenue Service's website has those thresholds and limits built in, she said. But handwritten returns don't.
About 60 percent of tax returns nationwide are filed between the last week of January and the first two weeks of February, said Jim Petersen of Jim Petersen Taxes of Richland.
People who think they will owe money in unpaid taxes should file returns early, Petersen said. Payment is not due until April 17, and the earlier they file, the more time they have to come up with the money after learning the exact amount.
And filing early also means a refund will come sooner, said Imran Sharif, Jackson Hewitt Tax Service general manager. Sharif and his wife, Amber, own the Jackson Hewitt Tax Service franchises in the Tri-Cities, Walla Walla and Hermiston.
The IRS has changed its internal process to try to get refunds to taxpayers faster this year, Sharif said.
And the IRS is pushing for tax returns to be filed online, Petersen said. The IRS claims there are about seven errors for every 1,000 keystrokes when paper tax returns are entered into its database.
One major change taxpayers might notice is the end of the work-to-pay tax credit, which was worth $400 for an individual who earned less than $75,000 and $800 for a married couple who earned less than $150,000, Sharif said. The two-year tax credit expired.
Common rules to remember are that taxpayers can't deduct something more than once and can't deduct what they don't pay, Petersen said. But education is an exception.
Some college students don't realize that even if they aren't paying their student loans yet, they can still take the education credit, Sharif said.
The American Opportunity Credit is up to $2,500, and 40 percent, or $1,000, is refundable, Culver said.
Taxpayers should itemize deductions instead of taking the standard amount when an itemization would result in a larger deduction, Petersen said.
Some deductions that people don't always take when they itemize include mileage driven for charitable work and miles driven to seek medical care, he said.
"The most common mistake that taxpayers make is not keeping good records," Petersen said.
Taxpayers who want to itemize on their tax return need to keep records of what exactly was donated to charities and record mileage for medical trips, he said.
And those who donate need to remember to get a slip from the charity for their records, Sharif said.
A common error married couples make is filing separately on the belief that will benefit them, Petersen said. In general, people pay more on separate tax returns than they would on a joint return. One situation where it does make sense for a married couple to file separately is if one adult has medical expenses that exceed 7.5 percent of their adjusted gross income, he said. Those deductible medical costs would include what the person pays for medical insurance, travel to and from appointments and motel costs.
And if someone has a question during the year about how something may affect the taxes they pay, they should ask a tax professional, Petersen said. That can help them save in taxes.
For example, retirees who take their 401(k) savings in a lump sum could be pushed into a higher tax bracket, Petersen said. In that case, it's better to take smaller chunks out in multiple years.
And if someone is under 59 1/2 years old, they will have to pay a 10 percent penalty for using their 401(k), he said.
Those who are confident doing their own taxes and comfortable with numbers should do their own personal tax return, Petersen suggested.
They should also check when there is a significant event in their life such as marriage, divorce, death or children becoming 18 because that can affect taxes, he said. In general, children are no longer dependents after they turn 18 unless they are still in school, and then age 24 is the cutoff.
But if they have rental property, run a business or are a stockholder in a company, he suggested they at least talk to a tax professional before deciding whether to file on their own or hire someone.
And if taxes would take multiple hours and a lot of questions, taxpayers should consider what their time is worth when deciding whether to hire a professional to prepare their taxes, Culver said.