Tax Tips 2009
Wednesday, April 15th, 2009 is right around the corner. If you REALLY needed the money, like some of my friends, you may have already filed your taxes and received your return. If you’re like me, you’ve probably procrastinated and are just now gathering your trade confirms and W-2s. Here’s some quick tips.
Open An IRA
This tip isn’t unique to just this year, but in an economy like this every little bit helps psychologically. Not only is saving for retirement wise, it can save you on your taxes too. You have up until April 15th to open and fund a Contributory IRA (not to be confused with a Roth IRA which is post-tax money), which has a maximum contribution of $5,000 this year.
If you don’t have a retirement plan at work, you can deduct the $5,000 from your income, no matter what you make. If you are a single filer and have a 401(k) or 403(b), as long as you make less than $53,000/yr you are still eligible for the full deduction. This phases out up to $63,000. These figures are $85,000 phasing to $105,000 for married couples filing jointly. Eqwitty recommends TradeKing for brokerage services.
Recovery Rebate Credit
You may not have been eligible for last year’s round of Stimulus Payments based on your 2007 Tax Return. However, if your financial situation changed drastically from ‘07 to ‘08, you may be able to claim a Recovery Rebate Credit (RRC). The RRC isn’t just for those whose tax situations have changed, but also life situations. If you gained a “qualifying child” in 2008, you may be eligible to claim a credit. Leave it to the IRS to make child birth (or adoption) sound inhumane.
Recent college grads and recent kicked-out-of-housers, if you could be claimed as a dependent in 2007, but not for the 2008 tax year you may also be eligible for the RRC. You can find more info on the IRS’ website here.
Job Loss Is Taxable
More than 1 out of every 20 of us finds ourselves without a job this tax season. The tax man still wants a piece of this action. Don’t forget that any income from a severance package is still taxable. This should be an easy thing to figure out as it should be listed on the W-2 from your former employer. Unemployment benefits are ALSO taxable. You should receive a Form 1099-G which will summarize those benefits so don’t forget to report it.
File Free!
The IRS is pushing for more online tax returns, and through Free File is offering free online preparation for those with adjusted gross income’s of $56,000 or less. The IRS is here to help once again here.
File An Extension
If you’re reading this and it’s April 14th, it might be a good idea to go ahead and file for an extension. For about $20, the folks over at FileLater.com can help you e-file a tax return extension with the IRS. Just a few minutes can buy you up to 6 months of time. You can get a discount of 20% off of their services by entering the code “CJ20″, however the code expires March 31st.
March 5th, 2009 at 11:41 am
You mention FileLater at the end of your article. I've used it the last two years. It's great!
March 5th, 2009 at 5:33 pm
thanks, steve. i personally haven't filed an extension myself, but i've heard good things about FileLater. good to hear that someone else has used them and recommends them.