By now, you’ve probably received your W-2’s and all the other forms you need to start working on your tax return for 2009. But did you know that, even though we’re in the new year, there are still things you can do to maximize your refund, or at least minimize your tax bill? Here are three tips to help you save at tax time.
1. TAKE CREDIT FOR HELPING HAITI
If you are one of the millions who donated to Haiti earthquake relief, you don’t have to wait until next year to get a tax break. A special tax provision signed into law in January allows taxpayers to claim a charitable contribution deduction on their 2009 taxes for donations to Haiti relief organizations from Jan. 11 to March 1, 2010. The provision includes contributions made via text message – just keep your phone bill to meet the IRS’ record-keeping requirements. Of course, if you prefer, you can deduct the contributions on your 2010 taxes instead, if that’s better for you. More info here: http://www.irs.gov/newsroom
2. FUND YOUR IRA THIS YEAR, CLAIM IT FOR LAST YEAR
You have until the tax-filing deadline of April 15 to contribute to your IRA for 2009. You can invest up to $5,000 to your IRA for the 2009 tax year and for 2010, or $6,000 if you’re 50 or older. Your contributions will reduce your taxable income. Also, when you invest in a traditional IRA, your earnings can potentially grow on a tax-deferred basis. More info here: http://www.irs.gov/taxtopics
3. BUY A HOME, CLAIM A TAX CREDIT
Two types of home buyers qualify for a tax credit on their 2009 returns:
"First-time" home buyers (defined as those who haven’t owned a primary residence for three years prior to the purchase) can receive are eligible for a tax credit of up to $8,000. This credit is available for home buyers who purchased a home from Jan. 1, 2009, to April 30, 2010.
"Move-up" home buyers who have owned their primary residence for five consecutive years out of the last eight can receive a credit of up to $6,500. This credit is limited to homes purchased after Nov. 6 and on or before April 30, 2010.
To qualify for either credit, you must enter into a binding contract by April 30, 2010, and settle on the purchase by June 30, 2010. If you claim this credit on your 2009 return, you must use a paper return (no electronic filing) and attach a copy of your settlement statement showing all parties’ names and signatures, the property address, the contract sales price, and the date of purchase. In most cases, your settlement statement is your properly executed Form HUD-1, Settlement Statement. To claim the credit, use IRS form 5405: http://www.irs.gov
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