Get a Head Start on Tax Season
2010 is looming on the horizon. Once the clock strikes midnight, confetti will fly, toasts will be made and 2009 will be history. January 1 not only marks the beginning of a new year, but it’s also the beginning of tax season.
Before the year comes to an end, there are some moves you should make in order to ensure that you get every penny of the average individual $2,345 tax refund.
Completing and filing tax returns for 2009 will be no easy task, since this year has been filled with stimulus money and a number of tax incentives from the government.
Depending on what incentives you tapped into, it is important to organize all your paperwork and receipts so when it comes time for tax preparation you will be able to make the most of your tax deductions. With only a few days left in this year, there are still some moves you can make to ensure that you can get the biggest tax breaks you are entitled to.
- Buy A Car: Consumers who buy a new vehicle from Feb. 17 until Dec. 31 have the opportunity to write off both the state and local sales tax associated with the purchase.
- Buy a House: First time home buyers may qualify for a tax refund of up to $8,000.
- Pay off Your Home Loan: Whether you opt to make an extra mortgage payment for the year, pay January installment now or pay your property taxes before the conclusion of the year, you can apply the appropriate credit to your taxes.
- Give Yourself: Whether you donate your used vehicle, gently used clothing, appliances or cash to your favorite charity, as long as it is properly documented you can claim the amount on your 2009 return.
- Go Green: As part of the strategy to reduce the nation’s dependency on foreign oil and to start saving the planet, the American Recovery and Reinvestment Act of 2009 offers tax incentives for those investing money into improving their homes energy efficiency.
- Take a Loss: Did you have a knee jerk reaction and sell off some stocks when the market had tumbled? The money you lost on those investments can help ease the financial burden and should be included on your tax return.
- Follow Doctor’s Orders: Taking care of your health should always be a top financial priority. If you paid for your medical insurance out of pocket, bought thousands of dollars of necessary dental work or have other qualified medical expenses that totals more than 7.5% of your adjusted gross income, include it on your Schedule A to reap a tax break.
- Work It: Was 2009 the year you had to reinvent yourself because of job loss? If you started a business from your home, paid money towards job search expenses or moved to an area because of job opportunities, you can write it off.
- Save for Your Future: Company-sponsored IRAs are a great way to build a healthy nest egg. The best part is the money contributed to the investment is made on your pre-tax income. If you max out the contributions to your plan, your income bracket can be lowered, resulting in a lower tax bracket for the year and more cash in your pocket.
By taking the necessary financial steps now, when it comes time to filing your 2009 tax return, you may actually receive a pleasant surprise. Why leave it to chance when with a little planning and effort now, you will be fully ready to get the largest tax return that you are entitled to.
What are you doing to get ready for tax season?
