It's that time of the year again: tax time.
You probably won't hear families across the country cheering, unless they are getting giant refunds.
So before you sit down to calculate your income, deductions and ultimate tax liability, learn a few tips about how you might be able to get a bigger refund, or at the least take the sting out of that tax bill.
For as long as there have been taxes, people have tried to cheat the taxman.
Consider the Virginia man who tried to write off the cost of 120 Super Bowl tickets. Or the South Carolina couple who attempted to deduct the cost of cat food. One was legitimate; one wasn't. You might be surprised.
But first, how about some more mainstream ideas on how to save some cash?
As part of the housing bailout bill passed by Congress, homeowners who do not itemize their taxes can claim a property tax deduction of $500 or $1,000 if they are married and filing jointly, in addition to the standard deduction.
And, if you were a first-time home buyer in 2008, you may be eligible for a tax credit of up to $7,500 or 10 percent of the purchase price, whichever is less.
There is an important catch to this credit, though. You have to pay it back in the next 15 years, in equal amounts each year, which makes it a bit more like a loan than a credit. So if you took the maximum credit of $7,500, you would need to pay back $500 per year for the next 15 years. But it still helps you get some much needed cash now when the economy is so bad, and you can pay it back a little at a time as things get better.
If you were laid off in the past year, most of the expenses incurred while looking for a job can be deducted from your taxes, so carefully track these expenses. For example, any money you spent on creating and mailing your resume is deductible. You can also deduct expenditures for career coaches and headhunters. You can even deduct long distance or cell phone charges related to the job search, as well as travel expenses incurred for interviews, including mileage.
College tuition credit: Parents who paid their children's college tuition in 2008 can deduct up to $4,000.
Teacher book credit: Teachers who paid for books or other classroom supplies can deduct up to $250.
Clean fuel credit: If you bought a hybrid car or truck, you're eligible for a conservation tax credit of between $250 and $1,000. Depending on the make of the car, you could get a fuel economy credit of between $400 and $2,400.
In this recession, unfortunately, many Americas don't have enough money to put food on their tables, let alone pay the IRS. Luckily, there is a payment plan option, but it comes with several strings.
You may qualify if your tax bill is less than $25,000 and can be paid off within five years. So most people will be able to take advantage of that.
These payment plans are not free of charge, but the interest rates are typically much more favorable than taking out a loan. The IRS' interest rate is 5 percent. Additionally, if you are approved for a payment plan, you will also be charged a one-time fee of $105.
An extension allows you to delay filing your official tax return for six months, a godsend for procrastinators. But don't think it will save you money.