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Money 911: As April 15 Approaches, Keep Tax Breaks In Mind

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By STACIE SCHAIBLE

sschaible@wfla.com

Published: April 2, 2009

TAMPA - You have less than two weeks to get your taxes in to the Internal Revenue Service, and there are some changes to keep in mind as you prepare.

Many changes are a reflection of U.S. economic problems.

With the housing market in a slump and a lot of people pounding the pavement looking for work, Uncle Sam is trying to help those who are hurting.

Marcia Bailey, an IRS tax specialist, says there are a lot of reasons refunds are bigger this year.

"On average, refunds have been about $100 higher this year and, so far, 91 percent of filers have received a refund," Bailey said.

"I think it's because most people are afraid they are going to owe money, so when they fill out their W-4 with their employer, they always give themselves a cushion to make sure a little bit more is taken out," Bailey said. "So what they've done, in essence, is give the government their money interest-free for one year."

Also, Bailey says, if you did not qualify for the economic stimulus rebate in 2007 or if you had a child in 2008, you could be eligible for the recovery rebate credit this year.

In 2008, all unemployment compensation was taxable, but there's good news on that front for 2009.

"The first $2,400 is exempt; most people get about $300 in unemployment per check and that means the first eight checks they receive will not be subject to taxation," Bailey said.

Another twist: depending on income, you might be able to claim up to $1,000 in property taxes as an additional standard deduction.

And remember, it's not too late to pad your retirement account.

If you haven't maxed out your retirement contribution, even though 2008 has passed, you have until April 15 to contribute.

If you're younger than 50, you can sock away up to $5,000 in an IRA, or if you didn't earn that much, it's up to the limit of your taxable earnings, according to the IRS. If you're older than 50, you can put up to $6,000 in the account.

Reporter Stacie Schaible can be reached at (813) 225-2739.

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