CHANGES and TIPS

a) Free federal online tax preparation and e-file if your adjusted gross income is $56,000 or less and you are age 50 or younger

b) Check on the status of expiring provisions. Many have been extended through 2009 and/or made permanent, as i.e., but not limited to mortgage insurance deduction on a qualified residences, teacher's educator expense deduction ($250), qualified charitable diestribution from IRAS , higher education expense deduction ($4000), deduction of state/local sales taxes in lieu of state and local income taxes etc.

c) NONTAXABLE combat pay counts as EARNED INCOME for earned income tax credit (EITC) purposes.

d) Stimulus payment you received is not taxable, but may reduce your recovery rebate credit.

e) If you bought your main home after April 8 2008, and before July 9, 2009 and you are first time homebuyer, you may claim a credit up to $7500.00, or 10% of purchase price of the home, if your MAGI, modified adjusted gross income is less than $9,5000.00 (17,000.00 if married filing jointly). More info in publication 17, page 255 (the credit is recapturable!)

f) Kiddie tax is for children under 18 years of age (and for children 19 to 23 years if FT students) unless they provide more than 50% of their own support , based on earned income in both cases.

g) Refundable Child Tax Credit for 2008: earned income of $12,050.00 has been reduced to $8,500.00.

h) NEW!! Non-itemizers may claim additional standard deduction for state/local real property taxes (max. $500.00 or $1000.00 if married filing jointly).

i) AMT exemption amount has been increased.

j) 5% capital gain tax rate has been reduced to ZERO (married taxpayers with income under $65,100 and single taxpayers with income under $32,500).

k) If you weren't eligible for an economic stimulus payment in 2008, you might still be able to get that money. You can now use your 2008 income to collect, and the IRS is offering help in calculating whether you qualify.

l) Certain Midwest states that were affected by severe storms, tornadoes or flooding between May and August 2008, may qualify for special tax breaks.

m) All of the IRA limits increased for 2008, taxpayers with higher income might still be able to contribute
before the April deadline.

n) The standard mileage rate for business use of your vehicle was 50.5 cents per mile for the first six months of 2008, and 58.5 cents per mile for the rest of the year.

o) Don't forget your child care credit (publication 17).

p) Remember to include deduction for stock losses.

..............................................................................to be continued!

BASICS:

Income minus allowed deduction = Adjusted Gross Income = AGI

Non-refundable credits implies credits that are being subtracted trom taxes you owe ( credit excess is not refunded).

Refundable credit implies credits that are "added" to federal income 'taxes already withhold or estimated tax payments already made'; any excess credit is refunded to you in form of a check.

T a x e s ....... Click for a few useful tips/changes

Make use of the free services offered by your community, if your taxes are not too complex.

OR if you qualify (income test), take advantage of the free e-file and tax software offered at the ir.gov website;

AND ................even if you do not qualify for the above bcause your income is too high (god bless you in this times!) go the the website of Taxact, which offers really free download of its fed tax software. KUDOS! Turbotax (Intuit) offers a light version and Taxcut (H&R Block) does NOT offer a free download for higher income tax payers.

The IRS offers to figure out some of your credits if you qualify and request it

Download "Publication 17" from irs.gov. It is very comprehensive and easy to understand.

Click here for some basics:

Download "Form 911" ("Request for Taxpayer Advocate Service Assistance") and see if you qualify for that service.

How do you choose a tax preparer? Who do you trust?

What about softwares such as Turbotax, Taxcut, etc., and their continous updates?
Intuit (Turbotax) explained that updates are of technical or content related nature. Regarding content
updates, the irs would contact you an update would affect your tax return.

Lots of franchise businesses' offering their services and guarantees.
Read the service agreement before signing it and ask to receive a copy (is there a OPT OUT clause?).
What is included in their guarantee and overall what is NOT included.
Do you have an idea about the total cost/fee for their service? Ask questions!
Most franchises do NOT offer a price list. Again, read the fine print before signing anything.

Make sure the employee applies all the allowable deductions and claims all the credits due to you.

...............and please, consider all other option before accepting some advanced LOANS offered ,
and demand precise information about the fees charged for those loans.