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.

http://money.cnn.com/galleries/2009/moneymag/0902/gallery.tax_tips.moneymag/8.html
http://www.usatoday.com/money/perfi/columnist/waggon/2009-03-26-start-now-to-save-on-2009-taxes_N.htm
http://www.nytimes.com/2009/02/10/your-money/taxes/taxtips.html?_r=1

10 Things the IRS Won't Tell You

COPY and POST by Mei Ling Lin

1. "Like it or not, you may need help with your taxes."
When Cindy Hockenberry and her husband sent in a tax-penalty payment in 2007, they knew there was a chance their math might not jibe with the IRS's. When that turned out to be true and the amount was much higher than expected, they decided to dispute it. Fortunately for them, Hockenberry's a pro. As tax research coordinator at the National Association of Tax Professionals, she spotted a glitch in the IRS's calculation; after visiting the local IRS office, the agency admitted its mistake and lowered the penalty. "There's no way the average taxpayer would have noticed," she says.

2. "You don't have to be rich to get audited."
The IRS's job is to enforce the tax laws enacted by Congress and to collect what's due. Its primary weapon? The audit, whose use has more than doubled since 2000, to surpass 1 percent of all returns, according to the Transactional Records Access Clearinghouse, a Syracuse University data-research organization. The increase can be attributed to the rising number of so-called correspondence audits -- those done through the mail asking for specific information rather than, say, investigating your whole return, says Susan Long, codirector of the organization. "It's more efficient."

3. "Fear is often our best weapon."
The threat of an audit is enough to send many folks scurrying to their tax preparer, and no wonder. "With audits, you're assumed guilty until proven otherwise," says Long. It's this fear, coupled with the complexity of the system, that causes some to overpay their taxes by not taking deductions they're entitled to, according to experts. A study by the Government Accountability Office found that 2.2 million people a year overpay, by an average of $438. "Americans are leaving a lot of money on the table," says Roni Deutch, a Sacramento-based tax attorney.

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