Transcripts

"Kevin McCormally's Tax Tips"-The Weekend Rush

SUZANNE PRATT: There are just a few days to go until the April 15th Federal tax filing deadline and many Americans will spend the weekend rushing to get their returns finished. So in tonight's "tax tips," Kevin McCormally, editorial director at "Kiplinger's Personal Finance," has some common blunders to avoid.

KEVIN MCCORMALLY, EDITORIAL DIR., KIPLINGER'S PERSONAL FINANCE: The final four may be over basketball-wise, but the final four days of the tax season start tomorrow. Don't let the pressure of the impending April 15 buzzer rush you into a costly blunder. Here are a half dozen goofs to avoid. Don't forget to check last year's forms for any carryover capital losses you couldn't use for 2006. You can revive them now. Don't forget that you can file a joint return for 2007 even if your spouse died last year. That will save you money on the return and double your rebate.

Now if you paid extra state tax when you filed last spring, don't forget to add that amount to what was withheld from your paychecks when claiming your 2007 state income tax deduction. If you got a state tax refund last spring, don't assume that it's taxable. For most taxpayers, including everyone who claimed the standard deduction, state refunds are tax-free. And for itemizers, part of the refund can be. If you got a 1099-Q form, don't assume you have to report the amount shown as income. Now that's the rule for most 1099's, but the 1099-Q is a different animal. It reports payouts from a state college saving plan or Coverdell account and the odds are very very good that the payout is completely tax-free.

Finally, if you ran the maximum $5,000 through a child care reimbursement plan at work, don't assume that that's the end of the tax subsidy for child care expenses. If you spent more than $5,000 for the care of two or more children, you deserve the child care credit on up to $1,000 of excess expenses and that could save you an extra 200 bucks. I'm Kevin McCormally.