TODAY   |  April 01, 2010

Tax tips to help you ‘Beat the IRS’

Roni Deutch, tax attorney and author of “The Tax Lady’s Guide to Beating the IRS,” discusses money-saving deductions and credits you should be aware of before filing your taxes.

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This content comes from Closed Captioning that was broadcast along with this program.

>>> we're back now at 7:44. this morning on "today's money," the tax man cometh. the april 15th deadline only two weeks away. if you haven't filed yet, we have some tips you'll want to know about. the author of "the tax lady's guide to beating the irs ."

>> it is very important to distinguish beating the irs and saving money on your taxes. that's our golda.

>> there are a lot of changes. every year there are changes and people have to be aware. for 2009 , the personal exemption , for example, has changed. what do we need to know about it if.

>> certainly personal exemption , when you claim a child, step child , a foster child or spouse, you now get $30,650 as an xemgs, versus $3,500. the more money have you in your tax return , in exemptions, the more you save.

>> a lot of people in 2009 , roni, lost their jobs so they received unemployment compensation and there's something new they need to know about the tax on that compensation.

>> certainly. unemployment compensation is taxable income . everybody out there who received it would get a 1099 -g from the government telling them exactly what they received. good news -- the first $2,400 is not taxable income . that's at least the consolation prize on that issue.

>> there's something else. we had interestingly enough, a story on this yesterday on our show, multi-generational households. with the tough economy, a lot of children are moving back in with their parents, a lot of parents are moving back in with their children. so you've got these multi-generational households. what's the tax issue involved in that?

>> isn't it wonderful to know, matt, if you take a family member in or you help them, you are going to save money on your taxes? how? you can claim them as a personal exemption which is worth, as we discussed, $3,650. but more importantly, your filing status may have changed. no longer will you file single, which is only worth $5,700. instead you can maybe qualify as head of household which is worth $8,350.

>> let me make sure i understand this. we only talking about immediate family ? in other words, children or parents? does this work for aunts and uncles and cousins as well?

>> yes, thank you. i'm an auntie. of course it qualifies. if you're an aunt, uncle, grandma, grandpa, regardless of that title, matt, if you're supporting somebody, you're going to be able to take advantage on your tax return .

>> pointing out some important tax credits , make sure people understand the difference between a tax credit and a tax deduction .

>> tax deduction merely reduced your taxable income , but a tax credit is like gold. it reduces your liability dollar for dollar. if you owe the irs $10,000, matt, and have you a $10,000 tax credit , it wipes your slate clean. wonderful.

>> couple to remember -- the american opportunity education credit.

>> american opportunity education is fantastic. you send a child to college, you're going to get $2,500 in tax credits per year for four years. how wonderful is that? send a kid to college, get a tax credit .

>> real, real quickly. first-time home buyer credit does not only apply to first-time home buyers.

>> yes, it also applies to repeat home buyers and it is worth $6,500 if you qualify. with housing prices at all-time lows, great time to buy a home, secure that contract by april 30th , take advantage now.

>> even if you have issues, file your tax return because penalties are not something you want to deal with. roni deutsche, thank you so much.