On the fourth day of financial freedom…I did my taxes! Ok, so everyone has to do their taxes that lives in this great country of ours, but this year there are lots of good reasons to do your taxes. To stimulate spending, the government has all kinds of great tax incentives to get people spending. If you haven’t taken advantage of the following tax breaks, grab your receipts and get to your tax advisors ASAP mamas!
- Help for Haiti—the government just allowed an extension on the 2009 tax deduction for charitable contribution to the Haitian relief effort. President Obama signed the law LAST WEEK that allows individuals that itemize their deductions for 2009 to get an immediate tax benefit rather than waiting until filing for 2010. Donations made by text message, check, credit card or debit card between Jan. 11 and March 1 are eligible—but don’t forget to save your proof of donations, such as a receipt from the charity or a phone bill if you made the contribution via text. Taxpayers who claim a standard deduction, including those who file short forms, are not eligible. To ensure that your donation is tax deductible, you can search the IRS’s website at http://www.irs.gov/charities/article/0,,id=96136,00.html. Contributions to foreign organizations are typically not deductible contributions.
- Did you have a child in 2009? Likely most of our readers did, so make sure that you get your bundle of cash for your new little bundle of joy. If you have children who are under age 17 at of the end of 2009, you can get a $1,000 tax credit per child on your tax return. A tax credit reduces your tax bill dollar-for-dollar, so three qualifying children, for example, can cut what you owe Uncle Sam by $3,000. The credit may be limited if your income exceeds certain levels, so again, make sure you talk to your tax advisor.
- Collecting unemployment? While we hate to have our mamas lose their jobs, there is some help from Uncle Sam this year. Also, if you went on unemployment after not being able to go back to your same job, this could also apply to you. The first $2,400 of unemployment benefits is tax-free for 2009—tax applies for benefits that exceed that amount. Additionally, if you were on the job search, you can deduct some expenses related to the job search!
- Home is where the heart is…and the cash! Don’t forget about the first time homebuyer’s credit–$8,000 for first time homebuyers and $6,500 if you lived in your previous home for at least five years and bought the new home after November 6, 2009.
- One Smart Mama… If you paid tuition expenses in 2009 you could be eligible for a credit of up to $2,500. There are also several other education deductions, such as the Tuition and Fees Deduction and the Lifetime Learning Credit. Don’t forget to bring up any education expenses with your tax advisor to see if you qualify!
While growing old and paying taxes are perhaps two of the less attractive guarantees in life, this year we have a few incentives to get moving on getting the returns in. Be sure to get the facts and really dive deep with your tax advisor to ensure that you are getting the maximum moolah back from the government!
Alison Smith, MSM, MBA, CRPS is a co-founder of ModMa. This article is meant for informational purposes only—be sure to consult your tax advisor to make final decisions. Every financial situation is different.
