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The new tax credit is being implemented this month through reduced payroll deductions.  It’s equates to about $10 to $15 per person per paycheck.  This tax credit will be worth $400 for individuals and $800 for joint filers.  Most people should have seen a difference in their paychecks by now.

However, next year if you make more than $75,000 as an individual filer or $150,000 as joint filers you will start to be phased out of this credit.  So it’s a good idea to make sure your payroll deduction is appropriate or you may wind up owing an extra $400 or $800 to Uncle Sam this time next year.

CNN Money has a good article that covers some situations where you may need to make adjustments to your payroll deductions.

See:
http://finance.yahoo.com/career-work/article/106831/Here-Comes-Your-Stimulus-Bonus

The tax filing deadline is less than a month away.  If you plan on using TurboTax (the program most people who self-prepare will use) you may want to get a jump on it this week.  As they do every year, they raise the price at the end of the tax season to encourage people to file earlier and not all show up at once on April 15th.  This year the price increase will take effect on March 28th.   Save some money and get started today.  They have  TurboTax Tools and Calculators and a Tax Preparation Checklist to help get started.

If you are undecided about which solution is best for you, we took a look at the major do-it-yourself tax solutions back in December.  The link is: http://moneycafe.com/blog/2008/12/time-to-look-at-tax-software/.

Here are some excellent articles courtesy of TurboTax to help with your taxes this year. 

• TurboTax – The 11 Most Overlooked Tax Deductions
• Turbo Tax – 10 Oddball Tax Deductions
• TurboTax – Should You Itemize?
• TurboTax – Tax Law Changes

See:
File online with TurboTax: #1 rated and #1 selling tax software
http://moneycafe.com/blog/2008/12/time-to-look-at-tax-software/

Next years federal budget (FY 2010) was proposed by the President today.  Spending is budgeted at $3,552,000,000 on top of this years (FY 2009) estimated spending of $3,938,000,000.  So basically, as a country we are going to spend $4 trillion this year and $3.5 trillion next year.   What does that mean to you if you are a taxpayer?  There are a number ways to look at this.  I have just a quick take for now. 

The Bureau of Labor Statistics reports that in 2008, the United States had 120 million full-time employees.  With unemployment rising this number is going down.  I estimate this full-time employed group accounts for more than 90% of taxes paid.  (Corporate taxes are about 8% of federal receipts right now and should be 9% next year.  Workers making under $20,000 (a generous proxy for part time employees) pay less than 2% of the federal budget through their payroll and income taxes.)  

Using these numbers, the average full-time employee is responsible for federal taxes this year in the amount of $29,534 and next year in the amount of $26,640.   

See:
http://www.whitehouse.gov/omb/assets/fy2010_new_era/Summary_Tables2.pdf
ftp://ftp.bls.gov/pub/special.requests/lf/aat12.txt
http://www.irs.gov/taxstats/indtaxstats/article/0,,id=133521,00.html

Previously we noted Californian’s who file early may get their refund on time if they file before February 1.  If you haven’t heard yet, California is out of money and can’t pay income tax refunds on time this year. 

Apparently, the door is already shut on currently getting an income tax refund.   See the Sacramento Bee and ABC News stories on this.

It is not known how long Californian’s will have to wait for their refunds.   The information could not be found at http://www.sco.ca.gov, the State Controller’s website.

The IRS began accepting e-filing today.   Early filers can get started by filing for a tax refund.   

Although if you live in California, you may have to wait for your state tax refund.  See  http://www.foxnews.com/politics/2009/01/16/california-forced-impose-day-delay-tax-refunds/  (Update for Californians.  If you can file now it may be the only way to get a prompt refund.   See http://www.msnbc.msn.com/id/28712615/)

Here are some links to software and solutions for do it yourselfers.  See our previous look at these solutions here.  http://moneycafe.com/blog/2008/12/time-to-look-at-tax-software/

Online Tax Preparation

Which TurboTax Is Right For You? Click Here. 

Compare TaxCut Online products

TaxACT
Compare TaxAct Online Solutions.

See the CompleteTax offering.

Desktop Tax Software

TurboTax CD/Download Products

TaxCut Software Complete Features List

TaxACT
Compare Software Downloads

Intuit is offering taxpayers free answers to tax questions up until January 31st at http://www.FreeTaxQuestion.com.  There is no purchase necessary.

According to Intuit, anyone can talk to an expert who will answer their personal, federal tax-related question for free. Taxpayers can submit a question online and they’ll receive a personal call back, at a time they request from a tax expert from TurboTax. This is a limited time offer and subject to availability through January 2009.

It may seem like Intuit products are getting mentioned often around here.  That is not our intent, but just the result of a big push by Intuit offering many new deals and free services.  Intuit dominates the market for personal finance tools and solutions.  When they have deals and freebies, we think they are worth mentioning.  They now have free versions of many products and are rumored to be coming out with more new solutions.  We are trying to track down the specific details of a new Quicken IPhone App.  If anyone has information about this, please share with us in the comments.