6 Tips For Finishing Your Federal Income Tax Return

By Sam Thacker

Before April 15^th, there are a few tax matters that income tax preparers have seen that taxpayers have overlooked  that you should know about that affect retirees and seniors.

1. The American Reinvestment and Recovery Act (ARRA) provided a tax rebate to certain retirees who received government pension or annuity payments in 2009. The rebate was $250 for individuals and $500 for married couples. Don’t forget to complete schedule M which indicates whether you received the check or not. If you didn’t receive the rebate during the year, the rebate will either reduce any tax due or increase your refund by the amount of the credit. Even if you have no tax due, you will get a rebate check. The schedule you must complete is Schedule M, Making Work Pay and Government Retiree Credits. Attach it to your Form 1040A or 1040. More information can be found at the IRS website.
2. If you donated cash to the Haitian relief effort between January 11 and March 1, for the earthquake that occurred in Haiti on January 11, 2010, you may be able to claim these deductions on your next tax return. In order to claim the deductions you must itemize your deductions and the cash donation must have been made to a qualifying charity. Even if you made your deduction from your cell phone by text message you are eligible. If you want to take the deduction for your tax credits, you can find more information in the short IRS bulletin about the topic.
3. This year you may buy series I U.S. Savings Bonds, up to a maximum of $5,000 with your tax refund. Use IRS form 8888. The form has specific instructions on how to fill in the form correctly. If you are a single taxpayer they will be made out in your name. If you are a joint taxpayer they will be made out in both names. You will receive your bonds by mail. The bonds can only be issued in $50 increments and you can specify how much of your refund you wish to use for buying bonds.
4. Speaking of IRS form 8888, you can also use this form to have your refund direct deposited in up the three accounts including a traditional IRA, Roth IRA, or SEP-IRA or savings bonds. It is important to make sure you have accurately entered the routing and account numbers. Also make sure your three deposits add up to the exact amount of your refund. Just make sure you have filled in the account and routing numbers correctly
5. Using direct deposit to receive your refund is faster, safer, and saves you a trip to the bank to make your deposit. Many seniors still like to actually receive a check in the mail. Just remember this will slow down your refund by as much as six weeks.
6. If you should make a mistake on failing to claim a deduction or tax credit and discover it after you have filed your return you have up to three years after your filing date if you will be due a refund as a result of the oversight. A good example of a reason to file an amended tax return is if you are a retired disabled veteran and the Department of Veterans Affairs makes a retroactive determination that retirement pay should be classified as non-taxable disability pay rather than income. If your file an amended tax because you have determined that you would have required you to owe more, you should file it even after the three years has expired. The IRS has detailed instructions on completing an amended tax return (from 1040X) on their website.

Sam Thacker is an Austin Tex based freelance writer.