If you haven't started your 2009 tax return, get going -- and be ready to pay for help even if you haven't before.
"Most people will need all the help they can get" this year, said
One big reason: The American Recovery and Reinvestment Act enacted by
The result is a bunch of new deductions and credits (and tax forms and worksheets) that can lower your tax bill but make things more complicated. "The one certainty," Carter said, "is that whatever route you take, it's best to start early."
If you hire a professional, go with know-how and experience.
For referrals, ask your friends, business associates and your local or state certified public accountant and/or enrolled agent organizations.
If you opt for do-it-yourself software, go with a reputable name.
TurboTax (www.turbotax.com), H&R Block at Home (www.hrblockathome.com) and TaxAct (www.TaxAct.com) offer quality products for returns of different levels of complexity. Many are free, particularly for simpler returns.
I've used TurboTax's Home & Business for years and like it for its thorough yet plain-English interview questions. I also appreciate the "help" features -- such as a free "Live Community" where other users and tax experts can answer questions -- and the navigation options, including being able to see interview questions and related tax forms at the same time. Your choice of software may come down to individual preferences and the program that best fits your needs.
Even if you get help, it pays to be aware of significant tax law changes for 2009 returns. "Tax-return preparation is a chore, and the desire to take shortcuts is common," said
Potential tax breaks are plentiful -- for buying a car, a house, going to college, making your home energy-efficient or even holding a job (the latter is the new "Making Work Pay" credit).
But the devil is in the details, with many complex eligibility requirements and "phase-outs" that reduce or eliminate tax savings based on income.
One example: First-time homebuyers may be entitled to a refundable tax credit of 10 percent of the purchase price, with a maximum credit of
But don't despair. With a qualified professional or tax-preparation software -- you can bet the pro will be using software -- you don't have to memorize all these details.
"Just know there are credits available," said
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Personal Finance - New Tax Provisions Make Filing More Complicated This Year
(c) 2010 Humberto Cruz