Taxes: Is It Really That Time Again?

No, not quite.  But to ensure a happier ending, Black Enterprise provides some tips on what you can do now to prepare for your annual dance with the tax man:

Homebuyers, gather your records. If you purchased your first home in 2009 or purchased a home after more than three years, you’re likely eligible for $8,000 homebuyer tax credit. To verify your home purchase when filing taxes, make sure you have on hand the U.S. Department of Housing and Urban Development Settlement Statement (HUD-1) which is typically issued to homebuyers at closing. If you don’t have a copy of the statement, contact your real estate agent or attorney for the documentation, says Genevia Gee Fulbright, vice president and certified public accountant at Fulbright & Fulbright, CPA, PA.

Divorcees, reassess your financial picture. Between alimony, child custody, and the emotional angst, divorces can get ugly. Aside from sorting out who gets what, there are also tax implications divorcees will need to consider. “This year, if you’re going to be filing as “single” or “head of household” you might need to change your withholdings,” says Fulbright. To do this you’ll also need to figure out who will claim the children, something that should have been settled in the divorce decree.

Because a divorce, and life after a divorce, can mean an entire new load of financial challenges, some may be forced to dip into retirement savings. If that is the case, that money you withdrew is now considered taxable income and can bump up your income bracket and your taxable income.

Start gathering receipts. If you’ve been lax in keeping track of receipts from charitable donations and medical expenditures – including co-pays from doctor’s visits and prescriptions– you’ll need to start doing so, pronto. For those who pay church tithes “ask for a print out of your year-to-date contributions,” says Fulbright.

Keep reading for more tips!

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