Common Mistakes to Avoid On Your 2008 Tax Return

<b>Common Mistakes to Avoid On Your 2008 Tax Return </b>“></td>
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<p>(<a href=NewsUSA) – Whether you use software, complete them yourself, or go to a professional, avoid these common mistakes on your 2008 tax return.

Recovery Rebate Credit

The IRS reports that nearly 15 percent of returns include errors in reporting 2008 federal stimulus payments. Errors result in higher taxes or a smaller refund, rejection of return or delayed refund.

Only about 3 percent of taxpayers will receive the Recovery Rebate Credit. They either did not receive a check or their family situation changed. Credits are to the refund amount or amount owed.

All taxpayers need to know their stimulus payment amount. Check your Notice 1378 or visit the Recovery Rebate Credit Information Center at www.IRS.gov.

Earned Income Tax Credit (EITC)

A quarter of those who qualify don’t claim the EITC, meaning they could miss up to $4,824. To qualify, you must have:

– A filing status of single, married filing jointly, head of household or qualifying widow.

– A Social Security Number (so must your spouse and qualifying children).

– Investment income of $2,950 or less.

– Earned income and adjusted gross income less than:

1) $38,646 ($41,646 married filing jointly) with two or more qualifying children;

2) $33,995 ($36,995 married filing jointly) with one qualifying child;

3) $12,800 ($15,880 married filing jointly) with no qualifying children.

Not E-filing

E-filing software checks for math errors and missing information, so the e-file error rate is about 1 percent versus 20 percent for paper returns. E-filing with direct deposit can also mean a refund in as few as eight days.

To e-file, you need either your 2007 adjusted gross income or 2007 self select PIN. If you can’t locate either, call the IRS at 800-829-1040.

Claiming Nontaxable Income

In addition to the economic stimulus payment, the following is nontaxable income:

– 401(k) contributions

– Pre-tax health insurance

– Pre-tax child care

– Welfare benefits

– Child support payments

– Gifts, bequests and inheritances

– Workers’ compensation benefits

More information about the aforementioned topics can be found at www.IRS.gov, and using TaxACT helps avoid all of these errors. Visit www.TaxACT.com for details.

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