4 tax hacks you might not know

You know to contribute enough to your 401(k) to get the full company match. Maybe you’ve even adjusted your withholding so you’re not giving Uncle Sam an interest-free loan.

Yet you may feel the need to do even more, especially if you’re making the last big push toward retirement. These hacks allow you to shelter more money from taxes now and when you retire. In my latest for the Associated Press, the 4 crucial tax hacks you might not know.

Q&A: Credits can boost a refund beyond the taxes paid — and keep millions out of poverty

Dear Liz: A friend of mine received a 2016 tax refund of over $9,000 even though this person did not pay nearly that amount in taxes over the course of the year. My friend has a fairly low-paying job with no benefits, is a single parent of two young children and receives no support from the children’s other parent. Given this scenario, is it possible to get a tax refund in an amount greater than what you paid in taxes?

Answer: Absolutely, and these refundable credits keep millions of working Americans out of poverty each year.

Refundable credits are tax breaks that don’t just offset taxes you owe but also can give you additional money back. Most of your friend’s refund probably came from the earned income tax credit, which was initially created in the 1970s to help low-income workers offset Social Security taxes and rising food costs due to inflation.

The credit was expanded during President Reagan’s administration as a way to make work more attractive than welfare. Each administration since has increased the credit, which has broad bipartisan support.

The maximum credit in 2016 was $506 for a childless worker and $6,269 for earners with three or more children. Your friend probably also received child tax credits of up to $1,000 per child. This credit, meant to offset the costs of raising children, is also at least partially refundable when people work and earn more than $3,000.

Thursday’s need-to-know money news

Today’s top story: Using your tax refund to spring clean your finances. Also in the news: A money conference for women, why the IRS wants their share of your March Madness winnings, and how Millennials can make car buying easier.

Use Your Tax Refund to Spring Clean Your Finances
Tidying up your money.

Lola: A money conference for women.
How to better deal with financial issues unique to women.

You Won! Congratulations — Now Pay Your Taxes
The IRS wants their share of your March Madness winnings.

5 Ways Millennials Can Make Car Buying a Smoother Ride
Making the process easier.

9 Smart Ways to Spend Your Tax Refund
Buying yet another overpriced gadget isn’t one of them.

How Much More It Costs to Own vs. Rent in Your State
Where does your state rank?

Tuesday’s need-to-know money news

Today’s top story: 7 reasons why the IRS will audit you. Also in the news: Big news that could affect your student loans, sneaky ways debt can change how you think, and how the “Once in a Lifetime” mentality screws up your budget.

7 Reasons the IRS Will Audit You
How to avoid triggering an audit.

This News Could Affect Your Student Loans
Heads up.

3 Sneaky Ways Debt Can Change How You Think
Don’t resign yourself to debt.

How a “Once in a Lifetime” Mentality Screws Up Your Budget
Something to watch out for.

Monday’s need-to-know money news

Today’s top story: How to cash a check without paying huge fees. Also in the news: How a Mom paid off $37,000 of debt, what you need to know about FSAs, HSAs and taxes, and why you should beware of mind games when shopping mortgage rates.

How to Cash a Check Without Paying Huge Fees
Don’t pay money to get your money.

How I Ditched Debt: Penny Pinchin’ Mom
Learn from a Mom who paid off $37,000 of debt.

What to Know About FSAs, HSAs and Taxes
Accessing your accounts and how they affect your taxes.

Beware of mind games when shopping mortgage rates

Friday’s need-to-know money news

Today’s top story: Disputing credit card purchases. Also in the news: Accepting money from parents, 3 investing lessons from the First Lady of Wall Street, and why the IRS wants a piece of your March Madness winnings.

You Can Dispute Credit Card Purchases, But Should You?
Use, don’t abuse.

Ask Brianna: Should I Accept Money From My Parents?
The pitfalls of being an adult.

3 Investing Lessons From the First Lady of Wall Street
Meet Muriel “Mickie” Siebert.

You won your March Madness office pool! Congratulations! now pay your taxes
One shining moment for both you and the IRS.

Q&A: The give and take of federal gift tax rules

Dear Liz: We are planning to build an addition to our home so that my mom can move in with us and will take out a loan to pay for it. Let’s say that we put down $50,000 and take out a loan for the remaining cost of $150,000. After the addition is built, my mom will sell her house and with the proceeds she will give us $200,000 to pay for the cost of the addition. Is this considered a gift? Or is it considered payment for a place to live (i.e. she gets something in return), and therefore it is not a gift?

Answer: What do you want it to be?

If you want it to be a gift, then it certainly can be. If your mother wanted to give you the money all at once, she would need to file a gift tax return because the amount exceeds the $14,000 per recipient annual exclusion. But she wouldn’t need to pay gift tax until the amount she gives away in excess of the annual exclusion reaches a certain limit (which is $5.49 million in 2017).

Gifts in excess of the annual exclusion also affect how much of a wealthy person’s estate can pass tax-free to heirs. If your mother is worth more than about $5 million, she should consult an estate planning attorney before making any gifts.

If she doesn’t want to bother with a gift tax return, she could give you and your spouse $14,000 each, or $28,000, per year until she’s given the $200,000.

If you or your mother prefer to make payments over time and treat the money as rent, you would need to declare the income. You could write off certain rent-related expenses, such as a portion of insurance premiums and repairs, that wouldn’t be deductible otherwise, plus you’d get another tax break from depreciating the portion of the property that’s considered a rental.

But that could trigger a big tax bill when you sell the home, so make sure you run this plan past a tax pro who can help you weigh the costs and benefits.

Thursday’s need-to-know money news

Today’s top story: Distinguishing between needs vs. wants and how to budget for both. Also in the news: The pros and cons of an LLC, the bull market’s 8th anniversary, and why you shouldn’t lie on your taxes.

Needs vs. Wants: How to Distinguish and Budget for Both
An important distinction.

LLC: Pros and Cons of a Limited Liability Company
An option for structuring your business.

The Bull Market’s 8th Anniversary in 8 Numbers
8 remarkable facts.

Tempted to lie on your taxes? Here are 4 reasons you shouldn’t
Not worth the risk.

Wednesday’s need-to-know money news

Today’s top story: 12 tips to cut your tax bill. Also in the news: Why Millennials shouldn’t forget about estate planning, 7 amazing things to be after you die, and the U.S. cities with the highest credit scores.

12 Tips to Cut Your Tax Bill
Itemizing is key.

Millennials, Don’t Forget Estate Planning
Putting it off could be a huge mistake.

7 Amazing Things to Be After You Die
A firework!

The U.S. cities with the best credit scores
Is yours on the list?

Monday’s need-to-know money news

Credit report with score on a desk

Today’s top story: Finding which tax credits you qualify for. Also in the news: New rules could mean lower life insurance rates, why you shouldn’t fear your mobile wallet, and all the credit card companies that offer free access to your credit score.

What Tax Credits Can I Qualify For?
Saving the most money possible.

New Rules Could Mean Lower Life Insurance Rates
New state laws could lower your rate.

Don’t Fear Your Mobile Wallet
It could be the safest way to pay.

All the Credit Card Companies That Offer Free Access to Your Credit Score
Checking your score is absolutely essential.