Monday, February 15, 2010

Questions for the Tax Lady: February 15th, 2010

Check out the following new Questions for the Tax Lady answers and feel free to ask me questions through one of the links below. You can send me an email, direct message or @ reply, and I will do my best to get an answer for you!

Question #1: In addition to donating to organizations providing relief in Haiti, is there anything else I can do now to lower my 2009 tax liability?

Yes, you can make retroactive payments to a traditional IRA anytime before the April 15th deadline. Therefore, any contributions can help reduce your 2009 tax liability. For more information, check out this blog entry explaining traditional IRA deductions.

Question #2: Do I need to report income from a rental property on my tax return?

Yes. You will need to report your rental property income on Schedule E of IRS Form 1040. You will need to include all rent payments as part of your gross income—this is line 17 on IRS Form 1040. However, you must also report the following rental property related items as income:

  • Advanced rent
  • Security deposits
  • Lease canceling payments
  • Property or services received
  • Other expenses paid by tenants

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