Vol. 8

A regular newsletter designed to show you how to spend less for more.

10 Tips for Your 2010 Tax Returns Most of us don't look forward to tax time. Apparently, even Albert Einstein was baffled by the process, referring to filing taxes as "too difficult for a mathematician. It takes a philosopher." Well, we're here to share some ways you can save this year. Check out our general tips and then check to see if you fall into our special groups.

1) Convert to a Roth IRA This is a special type of retirement plan under US law that is generally not taxed, provided certain conditions are met. The Roth Individual Retirement Account (IRA) allows a tax reduction on a limited amount of savings for retirement. (The contribution limit for 2010 is $5,000.) When you withdraw money in retirement, there are no taxes due. 2) Non-cash contributions to charity If you charged a donation to your credit card in 2010, you'll get a deduction even if you pay the bill in 2011. Checks mailed out must have been postmarked by the last day of the year. You can also get a tax break if you donated clothes and household goods. Just remember — always keep the receipt. 3) Tax credit for green cars Buyers of plug-in hybrids and electric cars can take advantage of a tax credit of $2,500 to $7,500, depending on the size of the battery in the car. 4) Put money aside for a college savings plan You can save up to $13,000 in 2010 towards your kids' college education. Tips for the Unemployed: 5) The first $2,400 in unemployment benefits is tax-free Make sure you have a Form 1099-G that lists your benefits. If you are married and your spouse is also unemployed, the tax-free amount doubles to $4,800 when you file jointly. 6) Don't forget to deduct job-hunting expenses Give yourself time to gather all your receipts and records of these expenses before you file so that you'll get all that's coming to you. Don't forget to deduct career coaches, headhunters, job training programs, resume preparation and transportation to and from job interviews! Tips for the Self-Employed 7) You can deduct your professional space Even if you work at home, you can deduct that percentage from your rent or mortgage payments, utilities, etc. If you have a cell phone or landline just for business, that's a valid expense. 8) Don't forget about daycare You are entitled to deductions for any kind of childcare expenses for services incurred during your business hours. Tips for Seniors 9) Determine how much of your Social Security benefits may be taxable The higher your income bracket, the more likely some portion of your benefits will be taxed. Calculate your base amount, which is equal to half of your Social Security benefits plus your other income, including tax-exempt interest. 10) Taking care of grandchildren and other dependents may entitle you to additional tax breaks In these tough times, many generations of a family may be living under one roof. If you are supporting your family, you may be entitled to claim some of them as dependents, even if one or more of them is not your child. While you don't have to be a philosopher or a mathematician to take charge of your finances, filing your yearly returns can be a major headache. That's why we want to do our part to help you take advantage of as many tax breaks and benefits as possible. Just so you know, there are still lots of tips out there so it might be worth your time to do a little research!