Choose Simple Forms

• For most individual taxpayers, you can choose to prepare your income tax return on Form 1040, 1040A or 1040EZ. As the name implies, Form 1040EZ is a simple one-page form that takes less time to prepare than the full-length 1040. However, to use the 1040EZ, you must file as single or married filing jointly, be under the age of 65, don't claim any dependents, have total income below the IRS threshold, not itemize deductions and meet an array of other requirements. Using Form 1040A is still simpler than the 1040 but allows a little more flexibility than the Form 1040EZ. However, unlike the 1040EZ, the 1040 allows you to claim certain adjustments to income, a limited number of tax credits and allows you to claim your dependents.
  
  

File on Time

• One of the most important tax tips you should pay attention to is filing your income tax return by the deadline and paying all outstanding tax. If you need more time to prepare your tax return, you can easily obtain an automatic six-month extension by filing Form 4868. However, if you fail to file on time or obtain an extension, the IRS will charge you a penalty of 5 percent per month for up to five months. This penalty is calculated as a percentage of the tax you still owe after the deadline. Even if you are unable to pay your tax debt by the deadline, you should still file a return since the late-filing penalty comprises 4.5 percent of the monthly penalty.
  
  

Claim all Deductions

• Claiming all deductions you are eligible for may be a tax tip you hear every year, but since deductions are one of the few ways to reduce your tax bill, you need to pay attention to them. Most taxpayers claim the same deductions each year, but you should also become familiar with some of the ones you don't, especially if you itemize your deductions. Even smaller expenses you have can save you a bit more money. For example, many taxpayers don't realize that you can claim a deduction for the cost of searching for work during periods of unemployment. This may not be the largest of your deductions, but every bit helps.
  
  

Claim all Credits

• When you get to the end of your tax return and calculate the income tax you owe, a tax credit can really be helpful. This is because any tax credits you are eligible for will reduce the actual tax you owe on a dollar-for-dollar basis. And most important, the types of tax credits available frequently change, so it's imperative you stay updated each tax year.