Squeeze The Most Out Of Your Taxes

(CBS)  It's been a year of unprecedented economic turmoil, and many Americans are facing financial situations they've never experienced before.

Changes in the tax code make the process even more confusing.

But, in the first of a three-part Early Show series, "Tax Secrets Revealed," Amy McAnarney, executive director of the Tax Institute at H&R Block, shared numerous pointers, debunking tax myths along the way, to help you pay as little as possible and make the best of a bad financial year.

1. 2008 has come and gone. I can't do anything now to lower this year's tax bill. FACT OR FICTION?

FICTION

Yes, you can potentially lower your bill by these 3 things:
- Contribute to an IRA by April 15, 2009
- Maximize your contribution to your Health Savings Account by April 15, 2009
- Be a first time homebuyer in 2009, you could receive a credit of up to $8,000 on your 2008 tax return. This is a refundable credit, which means it first lowers your tax bill; then you get the remaining credit in the form of a refund.

2. I got laid off from my job last year and received unemployment. Even though that was money from the government, I heard I have to pay taxes on that. FACT OR FICTION?

FACT

Yes, it is true, but here are three other things to remember:
- This year, the first $2,400 of unemployment benefits is tax free!
- You may qualify for a 65 percent break on COBRA premiums for up to nine months. (for a typical family COBRA can cost $1,000 per month, so a $650 break is big)
- Job search expenses such as resume preparation, mileage to interviews, etc. are deductible, so keep track of those. Also, if you have to relocate for a new job, your moving expenses may be deductible too.

3. I received a stimulus check in the mail last year. I assume that's done and over, and no one is due any additional money from that round. FACT OR FICTION?

FICTION

Actually, you could be one of the one-in-five taxpayers who is due back hundreds of additional dollars. If any of the below apply to you, you could get more dollars. But, you must file a 2008 tax return. You may qualify for an additional credit if:
- No longer a dependent
- Had a baby / able to claim a dependent on your 2008 return
- Your income has decreased since last year
- You didn't file a 2007 return
Also, if your stimulus check was more than the Recovery Rebate Credit, you don't have to pay anything back.

4. I've had significant losses in the stock market this year. I've heard I can include those losses on my tax return. FACT OR FICTION?

FACT

- Yes you can. You take your losses and offset any stock market gain.
- Any amount that you have leftover from those losses, you can deduct those from your income up to $3,000
- Any amount you have leftover after that, you can carry forward and take as a loss on your future return.

Remember, you can only deduct your loss if you actually sold the stock. A drop in value is not deductible.

5. My wife and I have finally paid off our mortgage. Without mortgage interest, we don't itemize, so there's no additional deduction we can claim. FACT OR FICTION?

FICTION

For your 2008 and 2009 tax returns, taxpayers who DON'T itemize their deductions can now take an additional standard deduction for real estate taxes that they paid. This could be as much as $500 single / $1,000 for married couples filing jointly. Great news for retirees who have paid off their homes.

6. I keep hearing about the new stimulus check for this year - for $400 if I'm single / $800 if I'm married. This year's check will come in the mail like last year. FACT OR FICTION?

FICTION

The 2009 and 2010 stimulus payments (called the Making Work Pay Credit) will actually be given to you through your paycheck. You should see an increase in your paycheck starting no later than April 1st. Putting this money into your pockets now will help you and the economy.

However, this may be a good time for a "withholding check up" for two groups of people: those who work multiple jobs or dual-income households. If the reduced withholding exceeds the credit you can claim, it will reduce your refund or may result in a balance due when you file your return next year.

7. I heard that if I purchase a 2009 vehicle, I don't have to pay sales tax. FACT OR FICTION?

FICTION

You do have to pay the sales tax; HOWEVER, you may qualify to deduct the state sales tax and excise tax you paid on next year's return. Great time to buy a new vehicle!

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[ContactMarybeth]

Hello
Please clarify the comment regarding the $8000 tax credit:
"Be a first time homebuyer in 2009, you could receive a credit of up to $8,000 on your 2008 tax return. This is a refundable credit, which means it first lowers your tax bill; then you get the remaining credit in the form of a refund".
I know that there is much conflicting information going back and forth regarding the $7500/$8000 credit. I am under the impression that the $7500 tax credit was for the 2008 tax year, not the $8000 credit mentioned and that if the home was purchased in 2008 then the tax credit will be expected to be repaid unlike the $8000 credit for 2009 till December 1, 2009 which shall be forgiven if one stays in their home for three plus years.
I would appreciate your confirmation of how 2008 tax implications will be handled. thanks.

[KCGolfer]

Amy McAnarney is a natural. She should be a regular on the show.