Tax Tip of the Week
April 7, 2008


Make some last-minute tax moves

Warning: Dates on your calendar are closer than they appear.

The saying may seem especially true as the due date for your calendar-year 2007 personal federal income tax return approaches. Fortunately, you still have time for last-minute moves before April 15 arrives. Here are three.

1. Make your 2007 IRA contribution.

If you qualify, you can make a traditional Individual Retirement Account contribution by April 15, 2008, and claim a deduction on your 2007 return. The maximum contribution for 2007 is $4,000 ($5,000 if you're over age 50).

You may also be eligible for the saver's credit, which can save you as much as $1,000 ($2,000 on a joint return).

What if you have yet to establish an IRA? Generally you can open an account and make a contribution as soon as the paperwork is complete. Be sure to designate that your contribution is for 2007.

2. Choose the right tax form.

Simpler is not always better, because some deductions and credits are available only on certain returns. For instance, you'll need to use Form 1040 or 1040A to claim a deduction for your IRA contribution or student loan interest.

3. File an extension.

Still waiting for tax information from partnerships, S corporations, trusts, or estates? You can request an automatic extension of time to file and put off the federal due date for up to six months. The extension is automatic; you do not need to explain why you're asking for it.

To get the reprieve, you generally have to submit Form 4868 to the IRS, either electronically or by mailing a completed copy. In addition, you're required to estimate the tax you expect to owe, and to make the payment by April 15.

Note: Remember to check the rules for extending your state income tax return.

Please contact our office if you need more information or tax filing assistance.

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E-Mail us at: finance@ClevelandSeniors.Com