Sunday, January 10, 2010, AM | 1 Comment
Everyone is getting ready to do their taxes, most of the folks anyway before April 15, 2010 which falls on a Thursday. Either they would do their taxes themselves or get them done by a professional.
But there is nothing you can do now to make any changes for 2009. That year is gone, just a reminder to make changes now to lower the tax burden on your shoulders this year.
Twelve months from now, 2010 will be over. You better do something now to take a few steps away from Internal Revenue Service – better know as IRS.
Talk to your financial or tax adviser about the four steps that I have mentioned below. Maybe you can work on all 4 steps or a couple but here they are:
See if you can sign up for Flexible Spending Account (FSA) at work
If your employer offers FSA as a benefit to employees, then do sign up for it. Any money you want to deposit in FSA will be deducted from your paycheck, divided into pay periods for the whole year. This is tax-free account. With FSA, you can pay for qualified medical expenses such as deductibles, co-payments and coinsurance for your health plan. It also includes medical expenses not covered by the health plan, such as dental and vision expenses and over-the-counter drugs and medical supplies like contact lens solution, etc. Ask your employer for details.
Even if you lost money in 2008 and/or 2009, contribute to 401(k)
I think this will always be a good investment for your retirement. So do contribute as much as you can, close to the maximum allowed if possible. Those short-term losses, if any, don’t look so bad in light of the fact that a good bit of that money IRS would have taken anyway. Ask your employer for details.
The first-time home buying incentive is extended till April 1, 2010.
If you are eligible, take advantage of it. The interest you pay on your mortgage is tax deductible for almost all home dwellers so are property taxes. The extended benefits include $8,000 tax credit for first-time home buyers. IRS is also giving a $6,500 tax credit to current owners if they buy a new home by April 1, 2010. Take a good look at what Willie went through and find a good mortgage lender or a refinancing company. Ask your financial or tax adviser for details.
Newer technologies have eased the home-office deduction
It’s a lot easier now to take the deductions for home-office. Many telecommuters are using a part of their homes as offices. You could be eligible for this deduction. Ask your financial or tax adviser for details.
In a Nutshell
If you didn’t take advantage of the 4 small steps in 2009, it may be a good time to do so for 2010 and beyond starting now. Find a good Financial Adviser. Also, to file taxes, Find a good tax preparer.