Tax Preparation Checklist




Keep in mind, through the Invest in America program, TurboTax® offers some great discounts on TurboTax® Federal Products.* 

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TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. State filing charges apply. Limited time offer for TurboTax 2012. Terms, conditions, features, availability, pricing, fees, service and support options subject to change without notice. *TurboTax® is a tax preparation software product offered to our members through the Invest in America program and is not a product of this Credit Union. ** Accurate calculations guaranteed. If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we’ll pay you the penalty and interest. ***TurboTax live tax advice service is free and subject to availability, restrictions and change without notice. Available via telephone or live chat. See full offer details by clicking here. ****Maximum (Biggest) Refund Guaranteed or Your Money Back: If you get a larger refund or smaller tax due from another tax preparation method, we’ll refund the applicable TurboTax federal and/or state purchase price paid. TurboTax Federal Free Edition customers are entitled to payment of $14.95 and a refund of your state purchase price paid. Claims must be submitted within 60 days of your TurboTax filing date and no later than 6/15/13. Optional add-on services excluded. Cannot be combined with TurboTax Satisfaction (Easy) Guarantee.

10 IRA Tax Tips

Knowing these 10 IRA tax tips can help you when saving for retirement. When preparing taxes and setting up retirement accounts, it’s important to know how your IRA or individual retirement arrangement affects your tax return. Being knowledgeable will allow you to make smart decisions when contributing to an IRA and how to handle the account in the future until you request disbursement at retirement.

Use these ten IRA tax tips to make smart decisions regarding your retirement future:

  1. Money contributed to a traditional IRA is not taxed until disbursement. Not including Roth IRAs, the person who owns a traditional IRA is not taxed until they request money from the IRA during retirement. Usually, the person’s tax bracket is lower during retirement, saving the person money by waiting to pay taxes until they are retired.
  2. IRAs can only be owned by one person. When the person owning the IRA dies, a beneficiary can be awarded any portion of the monies in an IRA that remains.
  3. Use the correct form. When making nondeductible contributions to a traditional IRA, the taxpayer has to use Form 8606, Nondeductible IRA’s.
  4. Know if you are eligible for a tax credit. Use form 8880, Credit for Qualified Retirement Savings Contributions to find out whether you qualify for a tax credit.
  5. Persons can contribute to a traditional IRA up to the age of 70 years old.  If you are 70 1/2 years or more old at the end of a tax year, you may not contribute to a traditional IRA that year.
  6. To be eligible to contribute to a traditional IRA, the person who takes out the IRA or their spouse must have taxable income from specific sources. Income can come from a salary, wages, self-employment income, tips, commissions, or bonuses. Also included are taxable alimony and maintenance payments that the owner of the IRA received during the tax year. Income that does qualify includes deferred compensation, rental property income, pension or annuity compensation, and dividend and interest income.
  7. Contributions to an IRA can be made up till the tax filing date. You can contribute for the applicable tax year (the previous year) until April 15.
  8. Funds withdrawn from an IRA are taxable the same year they are withdrawn. Withdrawals of only deductible contributions are fully taxable.
  9. Early withdrawal may be taxable. Owners of traditional IRAs who withdraw monies before they are 59-1/2 years old may have to pay an additional ten percent tax.
  10. Late withdrawal may be taxable. Owners of traditional IRAs who do not withdraw the minimum amount after they turn 70-1/2 may owe an excise tax.

Contact the First Financial’s Investment and Retirement Center to set up a no-cost consultation at 866.750.0100 option 6 or visit our website for more information.

Article Source: Made Manual, Instructions for Life

What Are You Going To Do With Your Tax Refund?


For many people, good financial news is coming around April 15, when they will discover that they have a tax refund on the way.  It might be the start of even more good news, as there are some signs that the economy is also turning around.

If you get a refund check from the IRS, great. And if it’s the start of better economic developments for you and your family, even better.

But with positive developments, comes the need to make good decisions. If your financial situation improves – whether on a one-time basis or more permanently – what are you going to do, not only with the money, but with the way you operate financially?

One thing to consider is that your tax refund is not a gift from the federal government. The money belongs to you – it always did – and the government essentially borrowed it from you for the better part of the year without paying you interest. You might want to consider adjusting your withholding so less will be taken out of your check. We understand that people love their tax refund checks, but you could have been earning interest on that money all year long. Assuming you saved it and didn’t spend it, you would end up with more money that way than waiting for a refund check.

But that save-not-spend part of the equation is important. When you start earning a little more money, it’s a good time to reassess how you budget, how you save and how you plan.

On the one hand, you want to pay off any high-interest debt as quickly as you can. On the other hand, you want to put something away for your future – especially retirement. And it’s a good idea to have some money in a rainy-day fund – with easy access to the cash – in case of something unforeseen.

The best idea is to develop a plan that incorporates all of these priorities. Develop a budget that takes into account all of your regular expenses, then allocates portions of what’s leftover for debt payments, savings and a rainy-day fund.

Having developed that plan, treat your tax refund like a paycheck and use the money accordingly. Then treat all your subsequent paychecks in the same way.

There’s plenty you can do. In addition to paying off debt and saving, if there is something you’ve been needing (not wanting) to buy, it’s wise to pay cash for it if you can, so you don’t add credit card debt. Beyond that, priorities might include:

  • Home improvements
  • Investing in a tax-sheltered account, like a 529 or Roth IRA, depending on your income and goals
  • Investing in a taxable account like a Brokerage Account
  • Giving to charity
  • And if you still have money left over, buying something you just simply want isn’t such a bad thing to do

Our experts located at First Financial, can walk you through the process. It’s worth remembering: The economy tends to go in cycles, and when you save and eliminate debt today, you put yourself in a stronger position for when times are tougher. Make a plan, stick to the plan, and watch as your situation continues to improve. Maybe that tax refund check will be the start of something pretty special. Give us a call at 866.750.0100 option 6 to set up a no-cost consultation or visit our website for more information!

Representatives are registered, securities are sold, and investment advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC , a registered broker/dealer and investment advisor, 2000 Heritage Way, Waverly, Iowa 50677, toll-free 800-369-2862. Nondeposit investment and insurance products are not federally insured, involve investment risk, may lose value and are not obligations of or guaranteed by the financial institution. CBSI is under contract with the financial institution, through the financial services program, to make securities available to members. FR031214-CF9C

Getting a Head Start on Tax Planning


Tax day may be April 15, but tax season essentially begins as the previous year is ending. That’s because this time of year is the first opportunity to take the steps that will allow you to maximize your tax advantage as the filing date approaches.*

From December through February, you should be organizing records and watching for documents you may need. At the same time, you may have ongoing obligations for the coming year – perhaps a vendor contract or equipment you know you will need to buy. If it’s possible to pay cash in advance, the vendor may be willing to negotiate a discount in order to get the cash up front. This is not to say you should buy things just to get a tax deduction, but if you know you will need to buy them anyway, and you can afford to pay for them earlier, it only helps you to do so.

Aside from accelerating payments, gifts and distributions, this is a good time to generally get yourself organized for April 15th. Banks, brokerage accounts and retirement funds will likely be sending you statements you will need. Be on the lookout for them, and keep them in one folder that you will use for tax documents.

This is also a good time to review your beneficiaries and make sure these choices still reflect your priorities. Along these same lines, if you are planning to establish any educational accounts for your children, this is the time to do it.

And since you know you will owe taxes in the coming year, this is the time to estimate these amounts and budget for them.

It may take a little time, but taking actions like these will help to keep you organized and out of tax trouble in the year ahead – and perhaps for many years to come.

Have tax related questions or you’d like to set up a no-cost consultation with the Investment & Retirement Center located at First Financial Federal Credit Union? Contact them.

*Representative is not a tax advisor. For information regarding your specific tax situation, please consult a tax professional.
Representatives are registered, securities are sold, and investment advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor, 2000 Heritage Way, Waverly, Iowa 50677, toll-free (866) 512-6109.  Non-deposit investment and insurance products are not federally insured, involve investment risk, may lose value and are not obligations of or guaranteed by the financial institution.  CBSI is under contract with the financial institution, through the financial services program, to make securities available to members.  FR011204-32F7