Here is a short collection of money tips and thoughts as we reach the April 15th tax deadline.
The home buyers credit expires after April 30. First time home buyers can get a $8,000 refundable credit and there is a $6,500 credit available for current home owners to buy a different home. April 30th is the deadline to sign a binding contract, but you have until June 30th to completely close the deal.
Claiming the home buyers credit will force you to file on paper and your return will be subject to much closer inspection. The IRS plans to audit some 200,000 returns of people who took the home buyers credit so be sure to do your best to provide all the necessary paperwork with your tax return.
You have until April 15th to make your IRA contributions for 2009 so there are a few days left to fund a traditional IRA or Roth IRA. It can be worth calculating your taxes with and without the IRA contribution to help decide what type of contribution to make. If you mail in a contribution, make sure it is postmarked before April 16th.
The health care bill promises to make a lot of changes for workers. Some small businesses may decide there is an advantage of getting a bit smaller to avoid some of the expenses they will incur at their current size. If you work for a company right around the 50 employee mark, be aware of how the new laws impact your company because the changes might prompt some layoffs–particularly of people who make less than $80k per year.
If you don’t currently have health insurance, it is well worth your time to read through the provisions of the healthcare bill to understand how it will affect you. The government wants you to get insurance coverage and will give you some tax breaks to do it if you are at the lower end of the income scale.
Stocks & Funds
Stocks have risen over the past year, but many are still at a point where they are considered a bargain. A well balance mutual fund may be a good long term investment. Index funds are mutual funds that track a specific stock index. For example, you can get an index fund that invests in all the companies in the S&P 500. This gives you an easy way to invest in a diverse set of companies. Since the index fund is a mechanical allocation (they aren’t paying someone to pick stocks) the cost is usually very low.