Monday, January 30, 2006

Tax Time!

It is that time of the year again. And I just saved a bunch of money in my tax returns !

Well, (with apologies to nice folks at Geico!) reading this for 5 minutes can actually help you to ear 5% or more in tax refund! Let me elaborate on that - and I must add that this is only for the poor Indian graduate students like me. First year students get all their taxes back anyway - so it is not relevant for them. I do not know if you can do this if you are filling your returns "offline", but I would be tempted to say that there should be a way. But anyway - if you have not tried filling up the tax forms online - should give it a try - its fast, easy and remarkably convenient. There are hundreds of free services ( as the IRS website would tell you) - I would personally recommend esmarttax.

So this is what you do. Apart from the W-2 form , you should have also got a 1098-T form - which is basically a record of the payments you made to the school for tutions and related stuff. And surprisingly - not too many people are aware of the fact that it is tax deductible. So at some stage of filling up 1040-EZ, you can subtract in that amount from the gross income - and effectively getting 10% or so of that amount back in addition to whatever refund you were getting. It is as simple! And it does not require that you recieve a 1042-S.

And it works. At least in my case it did. My tax return was "approved" by IRS within a couple of days and the refund is on its way to me! And for once, I did not do something in eleventh hour!

And just in case - if you need help in filling up those forms - here is an useful link.

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