Wednesday, April 1, 2009

2008 Tax Saving Tips

By Pin-Yu Liao

The tax law has been changed this year. There are 8 tips on how to save tax for the year 2008.
1. If you invest in stocks, bonds or mutual funds and sold them at a overall loss, deductions are allowed to $3000 in ordinary income on your return. Your adjusted gross income will be decreased, and there will be less debt realized.
2. New tax breaks were executed by Congress.
3. There are some deductions enforced by law as part of last year’s economic stimulus. The State Sales Tax Deduction: you can take this deduction or write off your state income tax on your federal return. College Tuition Deduction: As a parent, you can deduct up to $4000 for your kid’s tuition expense.
4. If you don’t have a retirement plan offered by the company you work for, your 2008 IRA is deductible. $5000 will be deducted if you send the check for a 2008 IRA before and on April 15.
5. You are able to write off the cost of looking for a job if you were jobless in 2008. If you were laid off from a job where you can earn $100,000, your tax will be covered by the 15% bracket instead of 25% as normal. There’s also deduction for medical expenses. You are also eligible for a rebate check if you lost your job in 2008.
6. If you sold your portfolio at a loss last year, you can carry the loss forward to future years. You can still claim the loss even if you buy back the original stocks within 30 days.
7. Minimum distributions for retirement account have been waived for 2008 only.
8. Tax credits were renewed by Congress such as that constructing a green home will have a tax credit of $500.
9. Make sure to be aware that the changes of the tax credits may take place.

1 comment:

  1. These are some great tax saving tips where people can make use of. The tax laws will be changing now and then but the person has to be attentive and careful about the changes in the law so that he can plan for some savings.