File an Extension or Need to Amend Your 2009 Return? Don’t Forget These Credits

<b>File an Extension or Need to Amend Your 2009 Return? Don’t Forget These Credits </b>“></td>
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<p>(<a href=NewsUSA) – Dozens of new tax laws could impact your 2009 federal taxes. Experts recommend taking extra time and care with this year’s return so you don’t miss out on any tax breaks.

Only the Making Work Pay, energy and American Opportunity credits will be available again for 2010 returns, so take advantage of the other breaks while you can,” advises Jessi Dolmage, spokeswoman for 2nd Story Software, Inc., makers of TaxACT.

1. Get organized. Using TaxACT to file your return by October 15, 2010, or amend your 2009 return. If you’ve filed an extension, you can still prepare, print and e-file your 2009 federal return free with TaxACT Free Federal Edition at taxact.com. If you need to amend your return, you can do that quickly and easily with TaxACT Deluxe.

2. Contribute to your traditional IRA. The Making Work Pay Credit will again be distributed through decreased federal withholding in 2010, so if you were under 70-1/2 years of age at the end of 2009, contributing to your traditional IRA through April 15, 2010, can lower your 2009 tax bill. You and your spouse can contribute up to $5,000 each ($6,000 if age 50 or older at the end of 2009). Depending on your filing status, modified adjusted gross income and whether you or your spouse were covered by a retirement plan, your deduction may be limited.

3. Use tax preparation software. Free and low-cost solutions like TaxACT guide you through the new credits, deductions and tax laws. They also do the math, help find missing information and identify potential errors. TaxACT Free Federal Edition allows everyone to prepare and e-file for free — regardless of income, age, state of residence and military status. TaxACT also includes a maximum-refund guarantee and all e-fileable forms for simple and complex returns.

4. Consider itemizing. The standard deduction for 2009 is $5,700 for individual or married filing separately returns, $11,400 for joint returns or qualifying widow(er) returns and $8,350 for head-of-household returns. If your eligible deductions exceed the standard deduction amount, you’re likely better off itemizing. Software like TaxACT will identify your best option after you enter your deductions.

5. File and pay as much as possible by April 15. Even if you can’t pay your entire tax bill by the deadline, file early and schedule payment any time before April 15 (June 15 for taxpayers who qualify as “out of the country”) to avoid penalties and interest. If you need a six-month extension (four months if “out of the country”), Form 4868 is due by April 15 and will extend your filing deadline to October 15, 2010. Remember, an extension to file is not an extension to pay.

This is not the year to procrastinate, especially if you’re getting a refund. You could have your refund in as few as eight days by e-filing and selecting direct deposit. The exception is taxpayers claiming the first-time homebuyer credit. The IRS requires that a copy of your settlement statement be mailed with your return (to prevent fraud), and the IRS likely won’t start issuing those refunds until the end of March.

Learn more about 2009 tax law changes and TaxACT at www.irs.gov and www.taxact.com.

How to Successfully Start an IRA

<b>How to Successfully Start an IRA</b>“></td>
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<p>(<a href=NewsUSA) – Maybe your company offers a 401(k) plan. But even if it doesn’t, you need to get an IRA now. Because IRAs use compound interest and are not taxed by the IRS, contributing even a few thousand dollars a year can create a sizable nest egg.

And yet, according to the IRS, only 10 percent of the people eligible to create and contribute to IRAs actually do so. If you think you can’t afford an IRA, you’re wrong. Consider that Social Security typically pays $13,000 a year — unless you can live on that miniscule income, you’ll need to find an additional way to pay for retirement.

How do you know if you’re eligible for an IRA? “Anyone who earns a taxable income or files a joint return with a spouse who earns an income can contribute to an IRA,” explains David Bach, the author of nine national bestsellers, including “Start Late,” “Finish Rich” and “The Automatic Millionaire.” Bach recently shared his insights about IRAs with the readers of SUCCESS Magazine, where he offered the following advice:

– Start Early and Save Until Retirement. Thanks to the miracle of compound interest, those who start saving early end up with the largest nest eggs. “If you were to start at age 55, you’d contribute a total of $50,000 in the 10 years before you retire, at which point your account would be worth $72,433,” says Bach. “By contrast, if you started at 25, you’d contribute $200,000 over the next 40 years, and by the time you retired, your account would be worth $1.3 million.”

– Invest Wisely. You can invest the proceeds from your IRA any way that you want, but some moves are wiser than others. Bach recommends “target date” or life cycle funds, which are specially designed for retirement savings. The fund automatically makes sure that you have investments appropriate for your age, acting more aggressively in your younger years and becoming more conservative as you near retirement.

– Know When to Start Withdrawing. Legally, you can begin withdrawing funds from your IRA when you’re 59 and a half, but if you’re in a high tax bracket, you should put off withdrawals for as long as possible.

SUCCESS magazine offers a balanced approach to successful living by covering topics on business, wealth, well-being and philanthropy. Visit www.SUCCESS.com and search the August issue to read the rest of Bach’s advice.