Tax Time!

It's that time of year again to gather your W-2's and 1099's and see how much extra money Uncle Sam took out of your paycheck.  I have been certified to prepare and e-file taxes through the Volunteer Income Tax Assistance (VITA) program the IRS has...and I do it for free.  So with the knowledge I've gained, I feel compelled to give some tips to you that might help you get some extra money.

1. Recovery Rebate Credit - This is a credit given for 2008 only. It is given to those few people who should have received an economic stimulus check last year but didn't, or who did not receive the full amount.  You will be asked how much you got in the stimulus package last year.  To be sure, you should check here with the IRS.  If you did receive the full amount, you may see your refund drop and you feel like you are getting less money. Let me assure you, this is not the case.  The default for most programs is to give it to you automatically.  Your refund is not any lower than what it would have been, had there been no stimulus payments.

2.  Get All Your Credits and Deductions - If you don't have enough expenses to itemize, there are still expenses you can claim, for either deductions or credits.

• Educator expenses
• Moving expenses for job related moves
• credit for contributions to retirement fund
• Payments on student loans
• Tuition and fees (if you are not someone else's dependant)
• Payments for child or dependant care

3.  Itemized Deductions - If you have more than $5,450 (single) or $10,900 (married) in qualified expenses, you have enough to itemize your deductions, and that is better for you.  Be sure and deduct all you can within the bounds of the law.  Here is a list of most of the qualified expenses:

1. Medical and dental expenses (have to be more than 7.5%of your income)
2. Either state and local income tax or sales tax (especially on car and home improvement purchases)***
3. Real estate tax and personal property tax
4. Mortgage interest paid as well as points
5. Mortgage insurance premiums
6. Gifts to charity (includes miles driven in your vehicle for a charity)
7. Unreimbursed job travel, union dues, professional association dues
8. Uniforms only if your job requires them AND prohibits you to wear them off duty
9. Tax prep fees from previous year

***If you live in a state with no income tax, you can deduct state sales tax.  Since you probably do not have your receipts from all year, go to the following IRS Sales Tax Calculator.  Input your information and the IRS lets you deduct this amount of sales tax, no questions asked. 

I hope this information helps with most tax returns.  Please keep in mind that this information is here strictly to help you.  It is not intended to be professional tax advice or instructions.  You may contact me with tax questions.  You may also refer to the IRS Website for all your tax questions.