[Summit] FYI- Important Info- if you do your own taxes...

[Breslers]

1) FYI- to avoid losing a benefit already given...  NOTE there is something
new this year- another federal tax form worth paying attention to.

This year most of us got an "economic stimulus grant" also called "making
work pay grant" --  of up to $400 for singles and $800 for couples, given
out via a temporary "reduction" in our taxes.

If you are paid by a regular pay check, the deductions from your "take home
pay" were probably adjusted earlier this year, to allow you to have access
to the extra money immediately.

BUT even if this was done, *you still need to fill out a "schedule M"* and
enter the amount calculated there,  into the part of your 1040 form which
shows "taxes withheld"  and/or "estimated taxes paid" (for self
employed/consultants).  It is an EASY, one page from, but if you don't use
it and enter the amount- when you do your federal taxes-  you will LOSE/undo
this tax credit and end up paying possibly $400 or $800 more than necessary.
You don't need to send in the "Schedule M", but it is the best way to
calculate the amount you DO need to put  on whichever form 1040 you use.

The instructions ARE in your 1040 booklet- but be sure you don't skip this!

or go tohttp://www.irs.gov/app/picklist/list/formsInstructions.html
and put in  Inst 1040 (Schedule M)

2) If you are relatively low income, at least according to the last line of
the first page of your 1040 form, but are still struggling to put something
into IRA accounts, *be SURE to check out form 8880*- retirement tax
CREDITS-  which reduce the amount of taxes you have to pay if you put money
away for your retirement.  This is BESIDES the deduction from the amount of
money you have to pay taxes on...

And even if  your income is just above the limit, or just above the next
bracket, check out what would happen if you borrowed the money to put away
enough more,  into a traditional IRA,  to lower your income to the point of
qualifying* for the benefit or the better benefit rate.  You may be
surprised to find the difference in your taxes due will cover paying back
most of what you borrow to contribute!!  It can be like making a totally
legal 50 or 75% return on your money for the first year.  Can't beat that!

Uncle Sam is trying to encourage those of us who can least afford it-- to
contribute to IRAs anyway-- because we are most at risk for being in trouble
in our retirement years-- b'lee ayin ha'ra.

or go to  http://www.irs.gov/app/picklist/list/formsInstructions.html
and put in Form 8880

Also, if you now discover you qualified for this in past years, you can
recover funds, I think either 2 or 3 years back (I forget how far) by filing
a form 1040X to correct your taxes.

NOTE  If you use a computer tax program be sure to check that these issues
are addressed.  The "federal phone tax credit" a few years ago, was
reportedly NOT included on all computer tax calculating programs.

I am NOT a lawyer or an accountant, just an business person, but I will be
happy to answer questions if you don't understand what I said.

Elianna

* When I have done this I always go some extra PAST the income line, in case
it turns out I have made a mistake in my math somewhere.  I don't want to
later discover I am suddenly back over the line, on the "wrong" side,
because I made a small mistake and had cut things so close there was no room
to absorb the mistake!  And also if I make a mistake, by the time the IRS
reports that back to me, it will probably be too late to add any more to
IRAs to lower my income further.
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