Tips to help you save some of your money

Gather your W-2, charitable receipts and investments statements. Tax season is here.

There are a few bright spots for filers, such as a new credit for first-time homebuyers, a bigger standard deduction for certain homeowners and one last chance to claim a tax rebate if you didn't get one last year. Congress also temporarily fixed the alternative minimum tax, preventing more than 20 million taxpayers from a tax that was expected to hit only the wealthy.

Here are some tax moves to consider:

Tax-free capital gains: As of 2008, investors in the 10 percent and 15 percent tax brackets have a 0 percent long-term capital gains tax rate.

These are investors with taxable income of up to $32,550 for individuals and $65,100 for joint filers. This zero rate runs through 2010.

"You could have income above that and have gains partially taxed at the zero percent rate," says Bob D. Scharin, senior tax analyst with Thomson Reuters' Tax & Accounting.

Say a couple has taxable income of $70,000. Of that, $55,000 is ordinary income and $15,000 is capital gains. The couple won't have to pay taxes on the first $10,100 of capital gains. The remaining $4,900, which is above the $65,100 income limit, will be taxed at the regular capital gains tax rate, Scharin says.

Sounds good, but there's a drawback. Capital gains is added to adjusted gross income, and when that goes up you could be ineligible for certain deductions or find your Social Security benefits subject to tax, Scharin says. Also, the age of the "kiddie tax" has been raised to prevent parents from transferring securities to children in low tax brackets to sidestep capital gains taxes. Children's unearned income - interest, dividends and capital gains - that exceeds $1,800 will be taxed at the parents' rate. The kiddie tax applies to children through the age of 18, or 23 if they are full-time students.

Last crack at rebate: Last year's stimulus check technically was a 2008 credit. But checks went out based on 2007 tax information to get money quickly into consumer's hands.

The criteria to qualify haven't changed, but your situation might have since 2007. You now might be eligible for a tax rebate if you weren't before, or you could get a bigger one if you didn't receive the maximum last year.

The maximum rebate is $600 for an individual and twice that for joint filers. Parents with young children can get an extra $300 per child. You must have at least $3,000 in income, and the rebate starts phasing out once income tops $75,000 for singles and $150,000 for joint filers. Dependents are unable to claim rebates.

If you had a child or your income fell below the cut-off limits last year, you could receive a rebate now. You will need to file a return to claim the "recovery rebate credit." Include any rebate amount you already received. If you forgot the amount, look it up online at

But don't get your hopes up. "According to the IRS, most people have already received everything they are entitled to when they got their rebate," says Jackie Perlman, an analyst for the Tax Institute at H&R Block.

Beefed-up standard deduction: New this tax season: a bigger standard deduction for homeowners who pay state and local real estate taxes but don't file an itemized return.

On top of the standard deduction, you can claim up to $500 of real estate taxes paid if single or up to $1,000 if filing jointly.

"This is most advantageous to someone who has a small or no mortgage," Scharin says.

First-time homebuyer credit: If you bought a house, you could be eligible for a tax credit worth up to $7,500.

"It's meant to encourage you to get into a house and help you handle the first year's expenses," Perlman says.

The credit applies to purchases from April 9 last year through June 30 this year. To qualify, you can't have owned another home in the prior three years and your adjusted income must be under $95,000 if single and $170,000 if filing jointly.

The credit is basically an interest-free loan that you must repay over 15 years. But stay tuned. As part of the economic stimulus package now in Congress, there's talk about not requiring the credit to be repaid for 2009 home purchases.

Lemonade from lemons: Got worthless stock? You might be able to write off the loss if the stock was truly not worth even a penny last year and has no expectation of recovering, Scharin says. This is a difficult threshold to meet, unless, say, a company is being liquidated in bankruptcy and shares are canceled, he says.

More commonly, you end up selling losers for something. But you can still get a tax break. Any capital losses last year can be used to offset capital gains, if you had any. Excess losses can be used to offset up to $3,000 in ordinary income. And if your losses are even greater - likely nowadays - you can use those losses to offset gains and income in future years.

"Check if you did have a carryover. Don't forget about it," Scharin says.

Out of work: Don't forget, if you collected unemployment benefits last year, that income is taxable.

But if you're looking for work in the same field, you can deduct any unreimbursed job-search expenses that exceed 2 percent of your adjusted gross income. This includes travel and lodging.

Also, you can deduct certain medical expenses that exceed 7.5 percent of your adjusted income - an easier threshold to meet when you're out of work, Scharin says. Among deductible expenses: the hefty COBRA insurance premiums you pay to remain covered under your old employer's plan.

Debt forgiveness relief: Congress took pity on troubled homeowners who had mortgage debt forgiven by a lender and then got whacked with a tax bill because canceled debt is considered income. Singles and joint filers don't have to pay taxes on up to $2 million of forgiven debt on a principal residence going back to 2007. Thanks to a recent extension, this tax break will continue through 2012.

IRA contributions: You have up to the April 15 tax deadline to make a 2008 contribution to a tax-favored individual retirement account. You can salt away up to $5,000, and an extra $1,000 if you're 50 or older.

Some contributions to a traditional IRA are deductible. You can deduct your contributions no matter your income if you don't have a retirement plan at work. If you do, some or all contributions can be deducted if income is under $63,000 for singles and $105,000 for joint filers.

"The question many people would ask is 'Why should I be doing that? I was laid off or the future is so uncertain.' " Perlman says. "Put something away. ... You will be happy about it in future years."

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