Are you facing a lot of different tax questions this year?
IRS experts have pulled together an overview of common tax issues in one convenient place — Publication 17, Your Federal Income Tax. This publication, available on the IRS.gov, contains helpful information for individual taxpayers.
This year for the first time, the IRS will issue a Spanish language version of this popular publication.
The on-line version of Publication 17 contains electronic links that make finding your answer simple. Both the downloadable PDF and on-line 2008 Publication 17 have over 900 hyperlinks. These hyperlinks allow users to immediately go to other parts of the publication, reducing searches to just a few clicks.
From stock sales to student loans, this nearly 300-page publication holds the answers to many of your questions:
Need help with a Roth IRA? Try Chapter 17 for Individual Retirement Arrangements.
Do you have a new child in the house? See Chapter 34 for the Child Tax Credit.
Are you selling stock for the first time? Check Chapter 16 for reporting capital gains. If you’re unloading losers, reporting capital losses is there, too.
Do you need to report the profit on your home sale? See Chapter 15 for some good news. Generally, if you qualify you only need to report the sale of your home if your gain is more than $250,000 ($500,000 if married filing a joint return).
And the best part about Publication 17? It’s free. To get a copy, visit the IRS Web site at IRS.gov or call 800-TAX-FORM (800-829-3676).
Patrick from Cash Money Life makes a good observation in his blog today: Even though 2008 is over, you can still contribute to your 2008 IRA until tax day – April 15, 2009.
An IRA, or Individual Retirement Account, is a common retirement plan account that provides certain tax advantages for retirement savings in the United States. Contributions are often tax deductible, but withdrawals may or may not be, depending on the type of IRA.
Between January 1 and April 15, 2009, you can contribute to both your 2008 and 2009 IRAs. During this time, you will need to specify which tax year your are contributing to, but many people don’t know the overlap exists at all. So for those who thought they had missed their deadline, they may be in luck.
The maximum you can invest in a Traditional or Roth IRA for 2008 and 2009 is $5,000 if you are under age 50. Those who are age 50 and older are eligible for catch-up contributions and can contribute up to $6,000 in 2008 and 2009.
It is important to note that you can only contribute up to the maximum limit across all individual IRA accounts (self-employed retirement plans may have different rules). I am under 50 years old, so I would be able to contribute any combination of $5,000 between any IRAs I decide to open. For example – $2,500 in a Traditional and a $2,500 Roth IRA, or $3,000 in a Roth IRA + $2,000 in a Traditional IRA, etc. so long as it does not exceed $5,000.
If you are married, you can also open an IRA in his or her name and contribute to that as well to increase (double) your overall IRA.