2009 Tax Tips

2009 Tax Tips

With your 2008 tax return due just around the corner, it's time to brush up on those tax skills. Here are some helpful hints that may help you when filing your return:

• If you are self employed, open and fund an SEP-IRA before filing your tax return. You can claim the deduction in 2008, even if you make a contribution to the plan in 2009.
• If you don't normally itemize your deductions, consider "bunching" expenses every other year to exceed the standard deduction.
• Estimate your federal and state tax liabilities. If you didn't withhold enough, increase your withholding for this year's last few paychecks.
• To exempt yourself from any penalty for underestimating Federal or state taxes, it is critical is that your withholdings of federal or state taxes meet one of the following:
• at least equal to 90% of your tax liability for 2008
• at least the same as your 2007 tax liability.
• If you estimate you will owe state taxes, you can chose to prepay those before January 1, and increase your itemized deduction for 2008.

401K – 3 Things to do Before 2009

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401K – 3 Things to do Before 2009

No matter what the markets are doing, the end of the year is always a good time to assess your retirement plan. To ensure you don't miss out on retirement planning opportunities, review this year-end checklist and complete as many items as you can by December 31, 2008.

Update Your Beneficiary
Beneficiary designations are a guarantee that any benefits payable on your behalf after your death will be made to the individual of your choosing and in the manner you wish. To be certain that only your intended beneficiary does, in fact, receive your benefits in the event of your death, make sure to update your electronic beneficiary designation.

Increase Your Contribution Rate
The end of the year is a great time to increase your contribution rate – even by a small amount! Putting away a small percentage of your earnings now gives you a head start on your retirement savings.

2009 IRS Maximum Contributions
You can contribute up to $16,500 before taxes are deducted and an additional $5,500 catch up contribution if you will be age 50 or older in 2009.

Motivating Yourself to Save

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Oftentimes, learning new methods to reduce spending and save money are not enough to change habits by themselves, and you may find yourself reverting back to old behaviors before you know it. Motivating yourself to save requires setting goals and constant visual reminders of those goals. Here are some useful tips:

• Write down your financial goals and do research to find out what you need to do to get there. Set realistic timelines for achieving these goals.
• Don't be afraid to choose goals such as a new home or car. These big tickets items can stimulate your savings attitude and financial motivation.
• Create visual reminders of your goals and attach them to places such as the walls in your room, the dashboard of your car, or the background on your computer.

Along with continually learning of new ways to save, following these goal-setting tips will help you realize your dreams.

Frugal Gift Ideas

Looking for gifts that will show your appreciation but not empty your wallet? The holidays can sometimes set people off-track from meeting their goals for a successful financial future. But even small gifts can make a big impact, and with the money left over, you can make a healthy contribution to your savings. Here are some penny-pinching ideas:

• Handmade gifts are unique and easy to make. Consider creating personalized gifts such as: ornaments, tote bags, candy/cookie jars and gift baskets containing food and personal care items.
• Magazine subscriptions are gifts that give year-round. They are inexpensive and can be easily tailored to any person's interests. Search around and you may be able to find subscriptions for under $5.
• Give a recycled gift. Perhaps you have an old trinket that would make a perfect gift for someone else. These sentimental gifts can last a lifetime.

Being frugal and saving are gifts in themselves, ones that will pay off in the future. Share your holiday money-saving tips on the new Feed the Pig discussion forum, or read more on reducing your spending.

Setting Expectations During the Holidays

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Today's tough economy can provide a great opportunity for you to teach your children some powerful lessons about money and spending during the holidays. Help them learn the value of prioritizing by asking them to choose the top 3 items on their wish list. Doing so will help them identify the gifts they truly want. Remember too, when fulfilling a child's desire for gifts, it's easier to under-promise and over-deliver.

Families can steer away from pricey gifts by creating traditions such as cookie bake-offs, inexpensive family grab bags and pick-a-name gift exchanges.

For more information, read Teaching Your Child About Money.

Visit the new www.FeedthePig.org for more money-saving tips.