"File early, file electronically and have the refund that you're anticipating directly deposited into your checking or savings account," said Tom Ochsenschlager, /*American Institute of Certified Public Accountants*/.
During a time of mounting unemployment, be prepared for another burden if you got a pink slip. Many are left on the hook for hundreds or thousands of dollars because taxes aren't automatically withheld from benefit checks.
"Now the rule does change. A lot of people are aware of the fact, maybe, that it changes for 2009, but that's only for unemployment benefits received from January 1, 2009 on," said Ochsenschlager. "In that case the first $2,400 that they receive is tax-free."
Charitable contributions are also tax-free. But like all things tax-related, you must keep your receipts.
"The IRS is getting very tough on that if you're taking a deduction -- an itemized deduction for a charitable contribution," said Ochsenschlager. "You do need a receipt from the charity, particularly if it's more than $250."
The key is to know your options and eligibility. For example, you still have until April 15 to make a contribution to your individual retirement account that can count as a contribution against last year's income.
"I've seen cases where I had a client who owed $5,000 in taxes. She knocked that by half by contributing to a traditional IRA," said Michelle Price, /*Edward Jones*/ financial advisor.
Lastly, file the return even if you can't pay the amount that is due. The IRS can be flexible in these hard times.
"Their ultimate goal is to get as much tax as they can, but they know that sometimes that's not possible at the time that you file the tax return," said Ochsenschlager. "So they're actually pretty reasonable in working out extended payment terms."
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