(Prudent Press Agency)---Potential inflation and changes made by Congress to help bring the country out of a recession will give taxpayers new deductions and credits when filing their taxes this year. Below are a few important things to note prior to completing your taxes. One of these changes says that you can do a Roth conversion this year regardless of your income. It can sound very appealing to spread the tax liability due over 2010 and 2011. But keep in mind, if the current administration does not end up changing the tax brackets, the tax rates on roth conversions could rise to 39.6 percent, up from 35 percent (depending on the tax bracket you fall into). Bottom line, if you do a roth conversion, pay all taxes in 2010 to save you money.


If you don't itemize your taxes, you could be missing out on additional savings, especially with some of these new changes going into effect this year. For example, there are expanded tax credits for home purchases and education and the tax credit for making your home more energy efficient has been reinstated. In nearly all cases, your taxes will be less if you take itemized tax deductions instead of the standard deduction. The only thing you have to lose is the time it takes to fill out the additional paperwork.

If you're getting a tax refund, get your exemptions changed at work to increase your monthly cash flow into your checking account. Why let the government make interest on your money. Many people like to use a tax return as a forced savings, but it's always better to pay yourself first with each paycheck.

For full details on these 2009 tax changes, click here. If you have questions, or are confused by some of these items, it's important to sit down with a tax professional now, or at least once every few years, to review your life changes and goals.

Julie Murphy Casserly, CLU, ChFC, CFP® is a 14-year veteran of the financial services industry and founder of JMC Wealth Management in Chicago. Julie helps people understand how their emotional attitudes and behaviors affect how they earn, spend and save. To purchase her award winning the book, "The Emotion Behind Money," also now available in an e-book format, please visit www.EmotionBehindMoney.com

*The tips above may not be suitable for all people, and JMC Wealth Management advises clients on their investment strategies on an individual basis.

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