Claiming Tax Relief: Get Started Early

If you're planning on claiming tax relief from your personal income taxes, don't wait the last second; in order to maximize your deductions, to take advantage of all the available types of relief available to you and to pay as little in federal income taxes as possible - start preparing now. It is never too early to start taking steps that will enable you to save money on your income taxes. There are many things that you can do every day of the year that add up to big savings when it comes time to file your tax return with the Internal Revenue Service. Here is a guide to will help you prepare to claim a few the tax benefits that may be available to you:

Step 1 - Get Your Purchases Organized

Find an inexpensive plastic file folder box and inexpensive cardboard file folders to use for your organization. Label your file folders according to the different types of tax-deductible purchases, such as:  gasoline and oil purchases, drug and medicine purchases, employment related expenses and even school related expenses for students.

Make sure that everything goes into the file box, and you should even make a section for things that you're not sure about. Simply mark the tab for that folder - “Maybe Tax Deductible”; in short, many purchases may be tax deductible and you should be prepared if they are. Therefore, make it a habit to hang onto as many receipts, work orders and invoices as possible. While you might not think they are very important now, when it comes time to file your federal income tax return -- you may be very glad to have them.

Step 2 – Consider Buying a Car

If you live in a state that charges sales tax on purchases, you can save a lot of money on your federal income taxes by buying a new car – but only in 2009. The Obama administration and Congress have passed legislation that allows taxpayers to deduct the amount of sales tax paid on a new car or truck purchases from their federal income tax gross taxable income. This particular tax relief benefit was created to stimulate the troubled car industry and promote the sale of new cars and trucks, and to help people save some money by making cars more affordable.

Step 3 – Take Your Tax Credits Now

If you have children, you can take advantage of the earned income credit right away -- you do not need to wait until it is time to file your federal income tax return. The earned income credit makes it possible for you to enjoy tax savings now. In fact, depending on your payroll wages and other deductions, you may actually receive extra money included into your paycheck. Therefore, if you have children, ask your employer for further details how to claim the earned income credit at payroll time.

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