April 15th is near and you're looking for a few more tax deductions. Look no further. Here are five last minute tax deductions.
1. Fund your IRA. Taxpayers can fund up to $5,000 into their IRA if they are eligible. An additional $1,000 can be made as a "catch-up" contribution for taxpayers age 50 and older. Eligible taxpayers are those that have earned income of at least the amount of the IRA contribution and are under age 70½. There are some income limitations for certain taxpayers to have a tax deductible IRA. The 2009 phase out for deductible IRA's based on Adjusted Gross Income is as follows:
- Single: $55,000 – $65,000
- Married where both spouses are active participants: $89,000 – $109,000
- Married where one spouse is an active participant: $166,000 – $176,000
2. Self-employed people should consider adopting a Self-Employed Retirement Plan ("SEP"). These plans allow self-employed individuals to put up to the lesser of 20% of their net-income or $49,000 into the plan annually.
3. Don't forget any Haitian relief donations made in 2010. The IRS allows cash contributions made to Haitian relief organizations after January 11, 2010 and before March 1, 2010 to be deducted on the 2009 return.
4. If you are eligible, take the First Time Homebuyers Credit. This allows first time homebuyers to get a credit up to $8,000. Taxpayers that already own a home that is a new primary residence may be entitled to a credit of up to $6,500. Also, transactions entered in 2010 can be claimed on the 2009 return. The income limitation is $125,000 for single filers and $225,000 for married couples. The buyer needs to have a binding contract prior to May 1, 2010 and close on the home before July 1, 2010.
5. File for an extension. OK, this is not a deduction. It will, however, allow you until October 15, 2010 to file your returns. This will give you more time to look for all of your deductions. Keep in mind the extension only extends the time to file. It does not extend the time to pay any taxes.
ACTION ITEM: Take a look at these last minute tax deductions and see if any can help you minimize your taxes this year.
Thomas F. Scanlon, CPA, CFP ®