- advertisement -

 

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
Page | 1 | 2 | 3 |


Using taxes to reduce taxes
Homeowners get another way to reduce what they pay Uncle Sam: using the real estate taxes they pay as a deduction.

If part of your mortgage payment each month includes an escrow amount that's used to pay annual real estate taxes, then the Form 1098 you get from your lender also will tell you this amount.

On 2008 taxes (and the 2009 tax year, too), homeowners who don't itemize their deductions also get a break when it comes to property taxes. In these cases, taxpayers who claim the standard deduction can add up to $500 if they are single, or up to $1,000 if married filing a joint return, to their standard deduction amount. If you don't have enough deductions to itemize but do pay property taxes, be sure to take advantage of this new -- but so far, temporary -- tax break.

Then there are any state and local income taxes you paid. Check your W-2 for this information, and be sure to deduct those, too.

Don't own a house? Don't despair. There's still a tax deduction opportunity for you if your state or county charges a personal property tax. Most often, this tax is on autos, so if you pay, make sure the collecting tax agency sends you a statement showing how much so you can put it on your Schedule A.

Work expenses can cut your taxes
Did you look for a new job this year? Kept your job but had to shell out for work-related items and never got paid back? Move to take a new job?

All of these situations can help reduce your tax bill, as long as you've got the documentation. In the case of job searches, find those receipts for anything related to your hunt -- though you must be looking for work in the same field.

If you kept your current job but had to pay for some items that your boss didn't reimburse you for -- travel expenses, uniforms, union dues, subscriptions -- then these can be deducted as miscellaneous items on Schedule A. Again, you'll need the receipts, so go through your paperwork collection carefully.

Good deeds, good records, good tax break
Good deeds can be their own reward. They also can reward you at tax time.

Cash donations to qualified charities can be deducted, and you should get a note from the charity acknowledging your gift if it was $250 or more. In addition, you won't necessarily need a formal receipt, but you will need some sort of documentation, such as a canceled check or bank or credit card statement, for your monetary gifts of any amount.

You'll also need that receipt you got when you dropped clothes and books off at the local Goodwill collection center to claim a deduction. And thanks to a new law, you also better make sure that the articles were in good shape. The IRS can deny deductions for anything that it deems of "minimal monetary value." So no giving away threadbare sweaters that really should go in the trash and then writing the gift off.

You can get credit if you volunteered at the local soup kitchen. No, you can't deduct the value of your time, but if you drove there, you can deduct 14 cents per mile as a charitable gift. Documentation of your effort can be as easy as a notation on your calendar of the days you worked and where the shelter was.

Accurate taxes require accurate information
Now that you know what data you'll need to file your taxes, you've taken a big first step in the process.

By knowing what information you need, digging out those documents and keeping track of all the tax-related account statements you've received, you'll immediately realize if you're missing anything or if something needs to be corrected.

In either case, you still have plenty of time to track down the proper documentation -- saving you time, anxiety and possibly money when you file your return.

-- Updated: Jan. 5, 2009
 
Page | 1 | 2 | 3 |





 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Compare Rates
NATIONAL OVERNIGHT AVERAGES
30 yr fixed mtg 4.45%
48 month new car loan 3.77%
1 yr CD 0.89%
Rates may include points
- advertisement -
- advertisement -
- advertisement -