With your 2008 tax return due just around the corner, it's time to brush up on those tax skills. Here are some helpful hints that may help you when filing your return:
- If you are self employed, open and fund an SEP-IRA before filing your tax return. You can claim the deduction in 2008, even if you make a contribution to the plan in 2009.
- If you don't normally itemize your deductions, consider "bunching" expenses every other year to exceed the standard deduction.
- Estimate your federal and state tax liabilities. If you didn't withhold enough, increase your withholding for this year's last few paychecks.
- To exempt yourself from any penalty for underestimating Federal or state taxes, it is critical is that your withholdings of federal or state taxes meet one of the following:
- at least equal to 90% of your tax liability for 2008
- at least the same as your 2007 tax liability.
- If you estimate you will owe state taxes, you can chose to prepay those before January 1, and increase your itemized deduction for 2008.
- Remember, taxes fund torture and war. If you object to this, consider filing a Peace Tax Return.
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