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Bankrate's 2009 Tax Guide
Filing & refund
Get it done right the first time with this advice on free filing, e-filing, documentation and refunds.
 
Tax-filing organization tips
Getting organized for the tax year
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IRS interest in your other assets
Wage income isn't the only earnings that the IRS taxes. Are you saving money for your child's college, a new house or retirement? Good for you -- and the tax man. Interest earned on most savings accounts is taxable.

You should get statements from each of the account holders as well as official tax forms. Copies of the forms also go to the IRS.

Interest earnings are typically documented on Form 1099-INT.

If you've branched out into stocks or mutual funds, you should get a Form 1099-DIV for each stock, mutual fund or money market account. Reports on the proceeds from broker transactions, if you use a broker, will be sent to you on a Form 1099-B.

Just like with your final paycheck stub, hang onto your year-end financial statements to compare with the official final tax documents.

That pesky miscellaneous income
Did you get a state tax refund last year? Did you rent out that old house you fixed up? Did you finally settle into retirement thanks to those monthly pension checks? There's a place for each of these on your tax return, so start getting this paperwork in order, too.

State and federal tax collectors work together. In the case of state tax refunds, that means the Form 1099-G you get detailing your refund also goes to the IRS, so hang onto your copy and report it.

Rental property can provide a nice boost to your balance sheet, but make sure you keep track of all it cost you to keep your tenants happy. These expenses can be used to offset your rental income, and that means less of your investment property earnings is taxable.

Some retirement payouts are taxable, at least in part. To help you determine exactly how much you owe, you'll get a Form 1099-R showing how much was paid to you during the year.

What if it wasn't such a good year financially? Let's say you were out of work for a while and collected unemployment. Sorry, but unemployment benefits are taxable. You'll get a separate Form 1099-G for this, so it needs to go into your filing preparation package.

Tax trimming starts at home
OK, you know what information you'll need to report your income. Now it's time to do the pre-filing preparation that could help you trim the taxable amount.

Costs related to your home are a good place to start.

Homeowners know the value of a mortgage. Not only does the loan get you into your house, the interest you pay on it is deductible. Your lender will send you a Form 1098 with this amount. You can check out your loan amortization schedule and get an idea of just what the deductible interest amount will be.

If you made an extra mortgage payment at the end of last year to up that interest amount, make sure it's counted. Sometimes lenders use automatic reporting programs that overlook extra payments. You can still claim the extra interest. Just make sure you document it in case the IRS follows up.

Mortgage interest isn't limited to your primary residence. If you have a vacation home, interest on that loan will be on a separate Form 1098 -- and it is just as deductible.

And don't forget the interest you paid on a home equity loan. Your year-end loan account statement will tell you how much this was, and in most cases it's deductible on your Schedule A, too.

First-time homebuyers get an added bonus. Eligible buyers of a primary residence can claim a new tax credit of up to $7,500. The credit is available on homes bought after April 9, 2008, and before July 1, 2009. The credit, however, must be repaid over 15 years.

-- Updated: Jan. 5, 2009
 
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