Tax deductions are always a good way to squeeze a little extra tax savings into your yearly tax planning and budgeting efforts. With the economy being on a rollercoaster for some time now, the government has had to get creative and come up with tax credits and incentives to help homeowners reduce their 2009 taxes. Therefore, we have some tax tips and help. Some may apply to you to help you get the most of your taxes this tax season.
Planning Your Retirement Contributions
The tax deadline is April 15 or you can file an extension to make IRA contributions for 2009.
401(k): For 2009 tax year, the contribution limit on a traditional 401(k) plan was $16,500 and $11,500 for a SIMPLE 401(k) plan. Anyone who was 50 or older in 2009 can make an additional $5,500 contribution for the traditional plan and $2,500 for a SIMPLE plan.
Traditional and Roth IRAs
For the 2009 tax year, the contributions were limited to $5,000 for anyone under 50 years of age. For anyone over 50 years of age, the limit was $6,000. SEP IRAs were limited to a maximum of $49,000. And, starting in 2010, everyone who owns a traditional IRA will be able to convert it into a Roth without income limitations.
Unemployed in 2009
If you were unemployed in 2009, the first $2,400 of unemployment benefits you received in 2009 is tax free, according to the American Recovery and Reinvestment Act. This only applies to benefits received in 2009.
Green Tax Incentives
Anyone who upgraded their home with energy-efficient home improvements is eligible for 30% of the cost of all qualifying improvements up to $1,500. The credit applies to home improvements such as insulation, energy-efficient windows or energy-efficient heating and air systems.
Homebuyer Tax Credits
First-time homebuyers who purchased a home in 2009 are eligible for a tax credit up to $8,000 with no payback required. The credit was also extended back in November of 2009 with a new deadline of April 30, 2010.
For more tax deduction information, visit the IRS website at www.irs.gov.
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