Ask the Expert

Published Sunday, March 01, 2009 12:04 AM

 

Income Tax Tips

by Quill Sr. Manager Financial Analyst Mark Schacher

 

Start planning now as April 15 is just around the corner! Here are a few things to think about when pulling it all together.

 

Commonly overlooked tax savings 

  • Recovery Rebate Credit: The Recovery Rebate Credit is a one-time benefit for people who didn't receive the full Economic Stimulus Payment last year and whose circumstances may have changed, making them eligible now for some, or all, of the unpaid portion.

  • Earned Income Credit: This is designed to offset the burden of Social Security taxes for low-income workers. You can claim this tax credit even if you have no tax liability. 

  • Hybrid Vehicle Tax Credit: If you’ve purchased a hybrid vehicle, you may be eligible for a tax credit. Refer to the IRS Web site at www.irs.gov for a full listing.

  • Child Tax Credit: You can claim up to $1,000 for each child, subject to limitations.

  • Savers Credit: Low- and moderate-income workers can take steps now to save for retirement and earn a special tax credit in 2008 and the years ahead, according to the Internal Revenue Service. The saver’s credit helps offset part of the first $2,000 workers contribute to Individual Retirement Arrangements (IRAs) and to 401(k) plans and similar workplace retirement programs. People have until April 15, 2009, to set up a new IRA or add money to an existing IRA and still get credit for 2008.

  • Education Credits: If you’re paying for tuition/fees for yourself or your family, you may be eligible for one of the following credits and deductions: Hope Credit of up to $1,800 per student; Lifetime Learning Credit of up to $2,000 per year; Tuition and fees deduction up to $4,000 per student; or the Student Loan Interest Deduction up to $2,500 for interest paid.

  • Mover’s Credit: You could potentially deduct moving-related expenses if you moved to be closer to a new job.

  • Charitable Donations: You may deduct your charitable donations if you itemize:  monetary donations, item donations, mileage for volunteering.

  • IRA: It’s not too late. You can still contribute to or open a qualified retirement plan by the end of the year (April 15 for IRAs) and lower your taxable income.

For more detailed information on these and many more tax exclusions/deductions, refer to www.irs.gov

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