With less than a month before the end of the tax year, you may want to set aside a moment during the busy holiday season to consider some quick IRS tips that may give you the gift of time and money saved next year.
1. Gather Your Records With the current tax year winding down, taxpayers should begin to gather and organize their tax records now to reduce stress at tax time. Start organizing records such as those relating to a home purchase or sale, stock transactions, IRAs and business or rental property. Also, go back and gather records confirming any donations made to charitable organization. To deduct a charitable donation, a taxpayer must have a bank record or a written communication from the qualifying charity showing the name of the charity and the date and amount of the contribution. A bank record includes canceled checks, bank or credit union statements and credit card statements.
2. Estimate your 2008 tax bill Go to IRS.gov for the IRS Withholding Calculator. This online application will help taxpayers ensure that they don't have too much or too little income tax withheld from their paychecks.
3. Find out if you're eligible for First-time Homebuyer Credit This new tax credit applies to home purchases after April 8, 2008, and before July 1, 2009. It reduces a taxpayer's tax bill or increases their refund. It is also fully refundable, which means the credit will be paid out to eligible taxpayers even if they owe no tax or the credit is more than the taxes owed. Operating much like a credit-free loan, the credit must be repaid over a 15-year period.