WCAX.COM Local Vermont News, Weather and Sports-How to Beef Up Your Refund
Member Center:
Burlington, Vermont - March 4, 2009
Former Senator Tom Daschle.
Treasury Secretary Timothy Geithner.
High-profile people found ways to save money on their taxes -- by not paying them.
But local accountants say there are legal ways to limit what you owe to Uncle Sam.
David Angolano has been preparing clients' tax returns for 28 years. He says despite the slumping economy, he's not seeing people feeling desperate.
"It's more a mood of concern, and some stress," he said.
But people hoping for a refund are counting on every dollar they can get.
New for 2008, homeowners who don't itemize their federal returns can get an extra property tax deduction of $500 for single filers, $1,000 for married ones filing a joint return. Angolano says many people don't know about it.
"We've seen cases where the standard deduction plus the add-on for the property taxes is a bigger deduction than itemized deductions for some people," he said.
Remember that stimulus check you got last spring? If not, you may get it now. For example, someone receiving Social Security who did not file a return in 2007 did not get a check.
"They were entitled to a stimulus, which they didn't receive because they never filed," Angolano explained. "If they file in 2008, even though they have no tax, they will get the $300 stimulus they're entitled to."
If you had a baby in 2008, that will get you $300, too. And if you made too much money to qualify for a stimulus check, you could get one now if your income dropped last year.
And a lower income may also qualify you for credits you were not eligible for at a higher income, such as the Vermont renters' rebate, which requires filers earn less than $47,000.
Another benefit that could kick in if your income dropped is the federal earned income tax credit.
"I've seen a few people this year who in the past would never have qualified that did," Angolano said.
The EITC is an incentive for people who qualify for food stamps or heating assistance, for example, to work without losing their benefits. The credit can varies based on how much filers earn and how many dependents they have. Details on those requirements are available online at http://www.irs.gov/newsroom/article/0,,id=202106,00.html.
"From my experience, people who qualify for it know how it works," Angolano said, "and people who have never qualified for it in the past may not know about it."
If you or a dependent are going to college -- even taking just one class -- the Lifetime Learner credit lets you cut up to $2,000 off your tax bill -- 20 percent of tuition or related expenses up to a maximum of $10,000.
"If a married couple's income dropped below $150,000, they may get some education credits that were not available before," Angolano said.
But one place you likely cannot get a break -- losses in the stock market.
"The most common question we get is, my retirement has lost money, can I write it off? And the answer is no."
Angolano says that's a complicated area of the law, and the deductions associated with stock losses are generally not favorable to most taxpayers. On that issue -- and on any other issues -- it's best to check with a qualified tax preparer.
Kate Duffy - WCAX News
