Quick Tax Tips for 2008 and the Current 2009 Year

2009 at a Glance:

• $7500 refundable tax credit for first time homebuyers (haven’t owned a home for the last 3 years) expires on 7/1/09.
• Max out your 401k (16,500 or $22,000 if 50 or older) and IRA ($5,000/$6000.
• Benefit from the retirement plan saver’s credit available to lower income taxpayers. If you are over 70 ½ stop or lower required distributions from your retirement plans until the stock market improves. A new law just passed to allow this thru 2009.
• Keep records of charitable contributions. The IRS has cracked down on this.
• Set up a NYS College Savings account for your kids, grandkids, or whomever.
• Beware of phone emails. The IRS does not send e-mails about your personal refunds or tax situation.
• Standard Mileage rate is 55 cents per mile for ’09.
• Social Security max is now $106,800.

For 2008:

• Open a folder to organize your 2008 tax documents as they arrive. You can dispose of 2005 tax returns and prior (unless you underreported more than 25% or your income – then the IRS can go back further).
• You only have until March 15th to get reimbursed from your 2008 flexible spending accounts before you lose it.
• E-file your taxes like the majority of Americans. The error rate of an e-filed return is less than 1 percent compared to 20 percent for a paper tax return.

For a more detailed tax newsletter click here