FINANCE - 11

Helpful Info For Filing Tax Return

The process involved in filing tax returns can a be tough job. This applies if you are not well versed with the present tax system. More so, it implies more work load if you have to process a huge volume of tax input requirements.

As a good citizen, you would like to have your share in your country's growth by filing your tax accurately and promptly. Here are some tips en route to a hassle free filing of tax returns.

Prepare your tax returns much earlier

Early tax return preparation can help you minimize committing entry errors. You can collate the necessary inputs prior to the filing deadline. With these required inputs, you can initially process these inputs without waiting for the last day of filing.

Maintain proper records

You need inputs for the preparation of your tax returns. These include records of your income and expenditures. If these inputs are not available, you are stuck. Thus, it is a must on your part to closely keep track of your records throughout the year. Having a good system whether it is manual or computer based for maintaining your records absolutely facilitates your tax preparation.

Use tax filing applications

The government itself would like tax filing as easy as possible. Evidently, the more streamlined the tax filing system is, the more collection is expected by the collecting agency. This is one reason why free tax filing applications are offered to the public for tax computation. Such applications, which you can use, vary from a simple worksheet type program to a multi featured tax filing program for installation on your computer.

Following the above tips will save you both time and money in filing your tax returns. Filing comes once a year but input requirements are not a one shot deal since the records required are all year round.


II. Tax Break for Seniors: Another Benefit for Seniors in a Tough Economy

For seniors who have been fortunate to have money in retirement accounts and maintain significant value in those accounts, Uncle Sam has just provided significant relief.

Both the House and Senate unanimously and in record-time passed the Worker, Retiree, and Employer Recovery Act of 2008, clearing the way for the President's signature. This new tax law temporarily suspends the requirement for taxpayers age 70-1/2 and older (and their beneficiaries) to make annual minimum distributions from their retirement plan accounts. This will provide older Americans some much-needed financial flexibility as they struggle to manage their finances during this difficult economic time.

Tax laws generally require individuals with retirement accounts to make required withdrawals based on the size of their account and their age every year after age 70-1/2. The new law suspends the required minimum distribution from retirement accounts in 2009. This waiver, available to everyone regardless of their total retirement account balances, applies to all defined-contribution plans, including 401(k), 403(b), 457(b), and IRA accounts. Suspending the mandatory withdrawal allows retirees to keep the money in their account if they choose, and possibly recover some losses. The suspension for 2009 also applies to beneficiaries of retirement plan accounts and IRA owners.

Retirement accounts are only one facet of a senior's financial landscape. There's social security, pensions, annuities and other possible income sources. No matter what your blend of income happens to be, you also have a blend of expenses. Of course there's housing, transportation, food, clothing and the big one for many seniors is medical. Today's economy has many seniors in the minus column when they subtract their expenses from their income.

Recent reports indicate that a large number of seniors eligible for retirement are continuing to work to make ends meet or looking for employment.With unemployment at its highest rate in over 25 years, that may not be the most viable option. Seniors who are homeowners with a good deal of equity in their home can create additional tax-free income, lump sum withdrawals or lines of credit and never have to pay the money back as long as they live in their home. They can do this with a reverse mortgage. The funds can be used for any purpose and most reverse mortgages are insured by the federal government. Reverse mortgages can be processed for seniors with no out of pocket costs. That means no upfront appraisal or application fees. There are no income or credit qualifications and reverse mortgages are available for seniors who are 62 or older.

With these different financial options available, thanks to Uncle Sam seniors may to able to weather the storm of this economy in grand style. According to market research, only 1% of seniors who are eligible for a reverse mortgage have one. However, it is much more popular than 5 years ago. Reverse mortgages are not for everyone, but to many it's a life changer, a true positive difference maker. It costs nothing but a little time to find out if it right for you.