2008 Tax Season Recap

Posted May 28, 2009 in Uncategorized by

We’re past tax season now. No more worries until next year, right? That may be largely true for most of us, but for many taxpayers, it’s not over yet. And for all of us, there’s much to plan for. You may be one of many who did not complete their 2008 income tax return and instead filed IRS Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return.  If so, you now have until October 15, 2009 to file your income tax return.

Similarly, tax season may not be entirely behind you if adjustments need to be made for inaccuracies on your 2008 return. You may need to file an amended return (IRS Form 1040X). The IRS usually corrects math errors or requests missing forms, but if you mistakenly omitted an item of income or a legitimate deduction or credit, you will want to file an amended return to make the correction. It is wise to file an amended return as soon as possible after you discover the error, but it must be filed within three years after you filed the original return in order to receive any tax refund resulting from the amended tax return.

And don’t forget about the impact the new $787 billion stimulus bill that President Barack Obama signed into law earlier this year will have on your 2009 income tax return.  

For example, the new economic stimulus bill will provide a tax credit of up-to $8,000 for first-time home buyers (someone who hasn’t owned a principal residence for three years before buying a house). Unlike an earlier home buyer tax credit, this one does not have to be repaid. Only those who purchase a home on or after January 1 and before December 1, 2009 are eligible for the credit, which is also subject to income limitations. Single buyers need a modified adjusted gross income of $75,000 or less to qualify for the full credit, that’s $150,000 for married couples. Those earning more than these thresholds may be eligible for reduced credits.

Even though another tax filing season is a year away, this may be the perfect time, while your mind is still churning with tax information, to consider the planning you can do to handle tax-related issues during the coming year.

Here are some items to consider in your tax planning:

  • Collect receipts for tax-related expenditures in a large envelope
  • Put together a folder to hold your tax information
  • Set up a simple spreadsheet to list out expenses and accounts for tax documents
  • 401 (k) Plan or IRAs – Plan out and adjust your total contributions and decide how you can divide that into the year
  • Keep track of eligible expenses (e.g. flexible spending plans) so you have a good guide to allocate funds when you need to decide next year’s allocation
  • If you have filed for an extension, diary September 15th as the date to begin finalizing your 2008 income tax return
  • Diary December 15th as the date to address transactions you will want to complete before December 31st (e.g. tax sales stocks, medical expenditures, large procedures for which you will deduct State sales tax)

Doing a little bit of research into the new economic stimulus bill and organizing all tax-related documents throughout the year will save you a ton of stress.