Georgia Southern University Professor Offers Tax Tips Everyone Should Know
Americans have two weeks left to file their taxes. A Georgia Southern University expert has some important tips everyone should know before they begin.
‘If you’ve got the documents you need and know what’s new this year, it’s much easier to get started,” says Jill Lockwood, Interim Director of the School of Accountancy and professor of accounting at Georgia Southern University.
Lockwood, who teaches tax law at the undergraduate and graduate levels in the University’s College of Business Administration, offers several tips to help make filing easier:
1. If you want to take some of the frustration out of doing your tax return, make a list of all the items you need to gather to complete your return. If you are having the return prepared, make a list of all items you must take to the tax preparer.
These items should include: W-2, 1099 for interest, dividend and stock sales, 1098 for home mortgage interest and property taxes, bank statements/ cancelled checks needed to verify deductions.
2. If you are preparing the return yourself, all of the forms you need can be downloaded free of charge at www.irs.gov.
3. You may be able to take the Earned Income Credit if a child lived with you and your earned income was less than $38,646 if single or $41,646 if you are married, filing a joint return. If a child did not live with you, you may still qualify for the Earned Income Credit if you earned less than $12,880 if single or $15,880 if married filing a joint return.
4. Remember, all contributions, no matter how small must be substantiated by a cancelled check or a receipt from the charity.
5. All single contributions of $250.00 or more must be substantiated by a letter from the charity. Your cancelled check will not be enough.
6. If you own stock and asked the company to use your dividends to purchase more stock, the cash you would have received still must be reported as dividend income.
7. If you have changed jobs and want to move your 401(k) to an IRA ask the bank or brokerage firm who has the IRA to send a form to your former employer requesting a ‘trustee to trustee” transfer. If you do, the transfer will not be taxed to you as a taxable distribution.
8. If you have sold stocks or bonds this year, you will need to know what you paid for the stocks/and or bonds that were sold. Do not wait until the last minute to look for this information. If your stock sales produced losses for the year, the maximum yearly deduction for an individual is $3,000.
9. You may be entitled to a $4,000 tuition deduction for tuition paid for post secondary
education that was not covered by HOPE or other scholarship money.
10. You and your spouse (if filing jointly) may be able to deduct up to $5,000 each if you contribute to a Traditional IRA. The deduction is $6,000 if you are age 60 or older at the end of the year.
11. If you take the standard deduction, you may be able to increase that deduction by the amount of property taxes you paid. The most you may add to your standard deduction is $500 if you are single and $1,000 if married filing jointly.
12. If you bought a first home after April 8, 2008 and before July 1, 2009 you may qualify for tax credit. The amount of the credit is $7,500 if you bought your house after April 8, 2008 and $8,000 if you bought your house between January 1 and July 1, 2009.
If you bought your house in 2009, you can still claim the credit on your 2008 tax return. You will need Form 5405.
13. You may qualify for a Child Tax Credit of $1,000 for each qualifying child under the age of 17.
14. The personal exemption for 2008 is $3,500 per dependent.
15. The standard deductions are as follows:
- Single: $5,450
- Married filing joint return: $10,900
- Married filing separate return: $5,450
- Head of household: $8.000
- Surviving spouse $10,900