Thursday, February 5, 2009

Tax Time!

It's the lovely time of year again, Tax time. I'm a bit odd, as I truly do enjoy doing taxes. I just love to add up all the totals and see what was made and what I can write off, I find it very interesting. Sometimes I think maybe I should have been an accountant. But I digress...

There are a few things I wanted to notify my readers about, making sure you all get the most up to date information before your file your papers for this year. Here are some things to look out for:

  • Stimulus Credit - There is a question on this year's form relating specifically to the stimulus credit we got last year of about $600-$1200. This was basically an advance on the credit we would have gotten for taxes this year. Because of this, if you had a child after receiving the credit last year, you are eligible for another $300 per child in 2008. Make sure to grab your credit on this year's taxes! If you didn't have any little ones then you will most likely have to enter zero on this line instead.
  • New Limits - New limits have been announced for 401Ks and Roth IRAs. The previous limit for 401Ks was $15,500 annually, it is now $16,500. The previous limit for Roth IRAs was $4,000 per person, it is now $5,000. There is also the option for catch-up payments if you're 50 or older, making these limits $22,000 and $6,000 respectively.
  • For Those Who are Retired - Due to our economy being on a downward spiral, the Worker, Retiree, and Employer Recovery law was passed in 2008 allowing a one-year moratorium on 2009 minimum required disbursements. This allows people the option of not taking our money from their retirement accounts at a large loss in hopes that the economy will be back on track by 2010. NOTE: If you setup automatic withdraws from your retirement accounts they will not automatically stop. You will still have to contact your retirement center (Fidelity for example) to stop the payments.
  • Deductions/Credits for Refinancing or Home purchase - If you refinanced your mortgage or purchases a home in 2008 you are eligible for a couple more deductions and credits this year. For those refinancing in 2008 or this year, not only is your interest for your mortgage tax deductible, is your PMI (if you have it). For those who purchases a home, you're eligible for a $7,500 credit. NOTE: This "credit" is really just a 0% loan at this point which will be paid back over the next few years of your taxes. There has been talk about making this a true credit that taxpayers won't have to payback... we shall see.

So there you have it! Some things to keep in mind when you or someone else is doing your taxes this year. Make sure if you are having someone else do your taxes that they don't miss anything, that's why it's helpful to keep yourself informed. I have had to correct taxes done at H&R block because they missed credits that I knew about in the past (namely the credit for moving expenses due to job relocation).

Have a happy tax season!


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