Senators Seek to Repeal Tax Credit for Ethanol Use

Yesterday two Senators introduced legislation aiming to repeal the controversial credit. According to some, this expensive tax credit is completely unnecessary, since the law requires use of ethanol in gasoline blending

From WJS.com:

The lawmakers, Sens. Tom Coburn (R., Okla.) and Ben Cardin (D., Md.), say the tax credit should be eliminated because federal law already requires blenders to put ethanol into gasoline, thereby eliminating the need for financial incentives.

Ethanol producers, on the other hand, say a repeal of the credit would be poorly timed because the industry can produce transportation fuel at a time when the U.S. is concerned about global oil supplies.

The Volumetric Ethanol Excise Tax Credit provides a 45-cent-a-gallon tax credit to blenders of ethanol. Last year, Congress decided to extend the tax credit until the end of 2011.

In 2010, the tax-credit program totaled $5.4 billion, according to the Government Accountability Office.

Earlier this month, the GAO, acting as the investigative arm of Congress, said the tax credit is "largely unneeded" because Congress already requires ethanol in gasoline. The so-called renewable fuel standard requires the use of 36 billion gallons of renewable fuels by 2022, with or without the tax credit.

Continue reading at WJS.com...

20% of Electric and Hybrid Tax Credits Claimed Erroneously

The Treasury Inspector General for Tax Administration released a new report a few days ago asserting that individuals received millions of dollars in erroneous plug-in electric and alternative motor vehicle credits

Here's what the TIGTA found:

As of July 24, 2010, TIGTA identified 12,920 individuals who electronically filed their tax returns and erroneously claimed $33 million in plug-in electric and alternative motor vehicle

credits. In addition, 1,719 of the 12,920 individuals also erroneously reduced the amount of Alternative Minimum Tax owed by almost $5.3 million. During this review, management took corrective actions to reduce erroneous claims when process weaknesses were brought to their attention. These actions have resulted in an estimated $3.1 million in revenue protected. The erroneous claims TIGTA identified resulted from inadequate IRS processes to ensure information reported by individuals claiming plug-in electric and alternative motor vehicle credits met qualifying requirements for vehicle year, placed in-service date, and make and model.

In addition, TIGTA found that the IRS is unable to track and account for plug-in electric and alternative motor vehicle credits claimed by individuals on paper-filed tax returns. Processes were not established to capture this information from paper-filed tax returns.

Finally, our review of electronically filed tax returns also identified individuals who erroneously claimed the same vehicle for multiple plug-in electric and alternative motor vehicle credits or claimed an excessive number of vehicles for personal use credits. TIGTA also identified improper claims for the credits by prisoners and IRS employees. TIGTA has referred the information on the IRS employees to its Office of Investigations for further review.

You can download a PDF of the TIGTA's full report at Treasury.gov...

Expanded Recovery Act Tax Credits Help Homeowners Winterize their Homes

According to the IRS's newest press release, taxpayers can now weatherize their homes and be rewarded for their efforts. In addition to reducing heating bills, certain home improvements will also qualify for a tax credit provided by the Recovery Act of 2009. However, these credits are only good until December 31, 2010.

Nonbusiness Energy Property Credit

This credit equals 30 percent of what a homeowner spends on eligible energy-saving improvements, up to a maximum tax credit of $1,500 for the combined 2009 and 2010 tax years. The cost of certain high-efficiency heating and air conditioning systems, water heaters and stoves that burn biomass all qualify, along with labor costs for installing these items. In addition, the cost of energy-efficient windows and skylights, energy-efficient doors, qualifying insulation and certain roofs also qualify for the credit, though the cost of installing these items does not count.

By spending as little as $5,000 before the end of the year on eligible energy-saving improvements, a homeowner can save as much as $1,500 on his or her 2010 federal income tax return. Due to limits based on tax liability, amounts spent on eligible energy-saving improvements in 2009, other credits claimed by a particular taxpayer and other factors, actual tax savings will vary. These tax savings are on top of any energy savings that may result.

Residential Energy Efficient Property Credit

Homeowners going green should also check out a second tax credit designed to spur investment in alternative energy equipment. The residential energy efficient property credit equals 30 percent of what a homeowner spends on qualifying property such as solar electric systems, solar hot water heaters, geothermal heat pumps, wind turbines, and fuel cell property. Generally, labor costs are included when figuring this credit. Also, except for fuel cell property, no cap exists on the amount of credit available.

Continue reading at IRS.gov...

Questions for the Tax Lady: October 25th, 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: Roni, if I donate Halloween candy and costumes to a local children’s home, is that deductible?

Answer: What a fun idea and a wonderful thing to do for those kids. Dressing up for Halloween is such a big part of childhood; I love the idea of helping underprivileged kids experience that!

To answer your question, yes you should be able to deduct the contribution so long as the children’s home is a recognized tax-exempt charitable organization. If you aren’t sure, you can ask the organization or you can check out www.IRS.gov to be sure. And remember, you will need some written acknowledgement of your donation from the children’s home, like a thank you letter.

Question: What are the differences between tax credits, deductions, and exemptions?

Answer: I’m so glad you asked this question, people use these terms interchangeably, and it drives me a little nuts.

A deduction refers to something you spent money on that can be deducted from your taxable income. The amount of the deduction varies based on what the expense was, how much you spent and IRS eligibility requirements. For example: if you donate $1,000 to a recognized charity, you could deduct your taxable income by $1,000.

An exemption allows you to reduce your taxable income, much like a deduction. However, exemptions are given in set dollar amounts ($3,650 in 2010) and are not tied to your actual expenses. Instead they are generally tied to the number of people you support. For example, you can claim an exemption for yourself, one for your spouse if you file jointly, and one additional exemption for each taxable dependent you support.

The tax bill impact of deductions and credits is tied to your tax bracket. If you are in the 25% tax bracket, a $1,000 deduction results in a $250 reduction in tax your tax bill. In the same vein - still assuming a 25% tax bracket - that $3,650 exemption will result in a $912.50 reduction in tax bill.

A tax credit is a dollar for dollar reduction in your tax bill. Credits are usually tied to how you spend money, or your income and family status. So, if you have a $100 tax credit, it will result in lowering your total tax bill by $100. Tax credits are almost always more beneficial than deductions.

There are refundable and non-refundable types of credits. A refundable credit means that if the amount of your credit exceeds the amount of taxes due, you can actually get a refund check for the rest. (For example, if your tax bill is $500, and you have a refundable credit for $1,000, you could actually get a refund check for $500.). Non-refundable credits can only result in a reduction of your tax bill, but not give you a refund. For example, if you have a $500 tax bill, and a $1,000 non-refundable tax credit, your tax bill will be reduced to zero, but you would not get a check for $500.

I hope this helps clarify these tax terms for you. Understanding the differences can help you make better tax choices.

Senate Passes $30B Small Business Credit Measure

The Senate passed new legislation on Thursday that will offer new tax incentives to business owners. According to Forbes.com legislators passed the bill in a 61 to 38 vote, which will establish a government fund to open up lending to credit-starved small business owners.

The tally gives President Barack Obama and his besieged Democratic allies in Congress a much-sought - but relatively modest - political victory with less than seven weeks to go before Election Day.

Obama said Thursday that the bill will help millions of small business owners across the country grow and hire. "These tax breaks and loans are going to help create jobs in the short term," he said.

The new loan fund would be available to community banks to encourage lending to small businesses. Supporters say banks should be able to use the fund to leverage up to $300 billion in loans.

The loan fund is opposed, however, by most Republicans, who liken it to the 2008 bailout of the financial system. They warn it would encourage banks to make loans to borrowers who aren't good credit risks.

Continue reading at Forbes.com…

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Talking About Money Before Marriage (DO IT!!!)

Small Business Jobs Tax Relief Act of 2010 passes House

Another Nominee for Tax Offender of the Year!

Tax Credits on Parade

Filmmakers Flock To Forum On State Tax Credits

From LATimes.com:

Question: How do you pack a theater with jaded movie industry professionals?

Answer: Show them the latest hot information on film tax credits. Nearly 200 people crammed into an auditorium at the Landmark Theatre in West Los Angeles recently to learn the latest skinny on the kind of topic that would set an accountant's heart aflutter.

The filmmakers, production executives and bankers were attending the Spring Fling Production Incentives Symposium, hosted by the aptly named Incentives Office, a Los Angeles firm that helps filmmakers and lenders navigate the welter of tax credits and rebates.

Despite the economic downturn that has left many states with staggering deficits, the across-the-country rollback in state tax incentives that some anticipated has yet to occur. Although some states have reduced or even suspended their programs, others, such as Florida, have greatly expanded their programs. More than 40 states still offer some form of financial enticement to filmmakers.

"The fact that these states are continuing their programs is an indication they are working," said Jeff Begun, a partner in the Incentives Office.

6 Biggest Mistakes Homebuyers Make

Buying a home is usually the largest purchase an American taxpayer will ever make, but it can also be one of the most confusing. As any one who has ever owner property can attest, there are many decisions to be made and what seems like hundreds of documents that must be signed. To help potential homebuyers rushing to purchase a house before the federal tax credit deadline, CNN Money has composed a helpful article explaining the 6 biggest mistakes to avoid.

1. Not knowing your credit score

If you're even toying with the idea of buying a home, you must know your exact FICO score. If you find it is less than ideal, wage a systematic campaign to raise it. Too many borrowers ignore this step and get surprised when they get interest rate quotes.

Once you've pored over your credit history and corrected any errors, your next step is to pay down revolving debt balances to no more than 30% usage. That will help raise your score significantly.

Why does it matter?

The lower your score, the higher your costs of borrowing. Fannie Mae and Freddie Mac, for example, charge higher up-front fees to borrowers with credit scores below 740.

For a buyer with a credit score between 680 and 700, the fee comes to 1.5% of the mortgage principal. On a $200,000 mortgage, that adds up to $3,000. Someone with a 740 score pays nothing.

Continue reading at Money.CNN.com…

Home Buyer Tax Credits Spark IRS Audits

From SunSentinal.com:

If you claimed a home buyer tax credit, don’t be surprised if your friends at the Internal Revenue Service ask for an audit.

The Associated Press reports that National Taxpayer Advocate Nina E. Olson told a congressional committee Thursday that about a fifth of all IRS audits done by mail in the past six months were for people claiming the credit. The audits can mean major delays -- up to five months -- in getting refunds, AP says.

Lawmakers approved an $8,000 credit for first-time buyers last year to help the beleaguered housing market. It was supposed to expire Nov. 30, but Congress extended and expanded the program. Existing homeowners looking to buy new principal residences now are eligible for $6,500.

First-time and repeat buyers must sign sales contracts by April 30 and close by June 30 to be eligible for the credits. And in case you were wondering, don’t expect any more extensions.

7 New Tax Credits Now Available Through the Recovery Act

This year the average tax refund is up by around 10% from 2008, and according to Representative John Larson, this increase can be attributed to the numerous tax savings in the Recovery and Reinvestment Act. In a new Huffington Post piece Larson explains the 7 new tax incentives created by the act, you can find some of them below or click here for the full list.

The Making Work Pay tax credit - Ninety-five percent of working families are already receiving the Recovery Act's Making Work Pay tax credit of $400 for an individual or $800 for married couples filing jointly in their 2009 paychecks - and will continue to see these benefits in 2010.

Tax credits for college expenses - Families and students are eligible for up to $2,500 in tax savings under the American Opportunity Credit as well as enhanced benefits under 529 college savings plans, which help families and students pay for college expenses.

The Homebuyers tax credit - Homebuyers can get a credit - up to $8,000 for first-time home buyers and up to $6,500 for upgrade homebuyers - for homes under contract by April 30, 2010 and purchased by June 30, 2010 under the Homebuyer tax credit. Over 1.7 million households have already taken advantage of the First Time Homebuyers tax credit.

Tax credits for energy efficient renovations - Taxpayers are eligible for up to $1,500 in tax credits for making energy-efficient improvements to their homes, such as adding insulation and installing energy efficient windows.

The vehicle sales tax deduction - Taxpayers can deduct the state and local sales taxes they paid for new vehicles purchased from Feb. 17, 2009 through Dec. 31, 2009 under the vehicle sales tax deduction.

Continue reading at Huffington Post.com…

The Tax Advantages of Going Green in 2010

Last week the RDTC Tax Help Blog posted a new entry explaining the tax advantages of going “green” in 2010. As you can see from the text below, there are plenty of credits and tax breaks for both individuals and businesses that make energy efficient purchases. You can find a snippet of the original entry below, or checkout the full text at RDTC.com.

Driving Green

Unfortunately many taxpayers are under the impression that all of the tax incentives for buying a hybrid vehicle have expired. However, this is not true. There are plenty of popular vehicles that qualify for the tax credit. A few 2010 Ford Hybrids qualify for a couple of credits, including the Fusion, which can qualify for a credit of up to $3,400. Additionally, electric vehicles such as the Chevy Volt offer the best credits. If you decide to buy an electric vehicle in 2010 then you can claim a credit of up to $7,500.

Conscious Commuting

If you live close enough to your work to be able to ride your bicycle back and forth every day, then you might be eligible for tax-free reimbursement from your employer (if they participate in the program). New legislation allows employers to give employees up to $20 a month for riding a bike to work. Additionally, employers can reimburse up to $230 per month of an employee’s public transportation expenses. Be sure to talk to your employer or human resource department to see if they offer conscious commuting reimbursements.

Solar Savings

Homeowners and businesses have been able to take tax credits for installing solar panels for a while now, but many taxpayers are resistant due to the high expense. However, the prices of solar upgrades have gone down drastically over the past few years. Additionally, even less expensive solar products – such as solar powered water heathers – will qualify for a tax credit of up to 30% of the purchase price. This credit can even be claimed against the AMT.

Continue reading at RDTC.com…

Tax Refunds May be Up, but How are Your Withholdings?

Tax credits launched under the Obama administration's economic recovery bill have boosted the average 2009 refund by nearly 10% from the previous year according to White House representatives.

The average tax refund for 2009 has reached $3,036, according to early data from the Internal Revenue Service.

The Obama administration officials said the increase reflects a growing number of taxpayers taking advantage of the benefits available under the $787 billion American Recovery and Reinvestment Act.

Under the Recovery Act, which was implemented last year to combat the economic crisis, taxpayers can take advantage of over a dozen tax benefits such as the making work pay credit, worth up to $800 for married couples filing jointly, the $8,000 first-time home buyer credit, and sales tax deductions on new car purchases.

The benefits are aimed at helping middle class families recover from one of the worst recessions on record, administration officials said.

The administration states that the nearly $300 billion in tax benefits will help jumpstart the overall economy by encouraging Americans to spend, which ultimately stimulates job growth.
However, some critics argue that the bigger tax refunds could be due to factors other than the Recovery Act credits, including a larger number of Americans withholding more last year due to unemployment or other economic hardships.

Individuals who work into the year and get laid off typically over-withheld while they are working, said J.D. Foster, a senior fellow specializing in fiscal policy at the Heritage Foundation, a conservative research group. That over-withholding can lead to larger refunds.

While, the new tax credits are great, please be sure your deductions are correct so as not to pay the IRS too much during the year. See my tax help blog entry regarding adjusting your withholdings.

For more information and full article go to http://tinyurl.com/ybd3h9l.

Questions for the Tax Lady: March 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: Are moving expenses tax deductible?

Not really. If you have to relocate for a job, then you can deduct the related costs. However, you must pass the IRS’ time and distance test. Meaning you must work full time for at least 39 weeks the first year after starting the new job, and your new place of work must be at least 50 miles further from your former place of residence than the old job was. For more information on moving related deductions check out this entry on the RDTC Tax Help Blog.

Question #2: Is it true the federal tax adoption credits are going to expire at the end of the year?

No, the tax credits are not going to go away entirely at the end of the year. However, the credit will be reduced by 50% (from $12,170 in 2010 to only $6,000 in 2011) unless congress extends the Tax Relief Reconciliation Act of 2001. Although the Senate and House are busy with controversial issues like health care reform and job creation, adoption credits are very popular and I would expect that Congress will extend the full credit, and possibly even increase its dollar value.

IRS Features Recovery Tax Credits on YouTube & iTunes

According to their newest press release, the IRS is uploading a series of videos and audio segments to “help taxpayers take full advantage of the 2009 tax provisions in the American Recovery and Reinvestment Act.” They have even launched a YouTube channel and iTunes pod cast to connect with younger audiences.

People can visit the video site at www.youtube.com/irsvideos to view information about the Recovery, tax tips and how-to videos. These videos will be in English, Spanish, American Sign Language and other languages.

The YouTube focus will be on the provisions of the American Recovery and Reinvestment Act. Videos will highlight the $8,000 first-time homebuyer’s credit for those who purchase a house this year, the sales or excise tax deduction on new car purchases and the expanded credits for education and energy conservation.

The IRS YouTube channel will debut with seven Recovery videos in English and ASL and eight in Spanish. Also, included will be a video on using the IRS Withholding Calculator. Many workers received the Making Work Pay tax credit in April through their tax withholding at work. However, people who have more than one job or working spouses should especially check their withholding to ensure neither too much nor too little is being withheld. People can use the calculator to help determine if they should make adjustments.

CA Gives Nearly $68M in Hollywood Tax Credits

From Mercury News:

California on Monday announced the first batch of movie and TV productions to qualify for tax credits under a film incentive program that former "Terminator" actor Gov. Arnold Schwarzenegger pushed through the Legislature and signed into law in February.

So far, 25 productions have qualified for $67.5 million in state tax credits, most of which would have relocated elsewhere if the state money hadn't been in place, said California Film Commission Director Amy Lemisch.

"On most of these productions, they were indeed location-scouting and budgeting in other areas outside of California," she said.

The Walt Disney Co.'s "Beverly Hills Chihuahua 2," was slated for filming in Vancouver had the funding not come through, and "Christmas in Beverly Hills" by Fast Lane Productions LLC might have become "Christmas in Arizona" if it had not qualified for state credits, she said.

One TV series, Comedy Central's "Important Things with Dmitri Martin," will likely hire 100 staffers based in California, she said.

Lemisch said the projects are budgeted to spend $347 million on basic production in California, and are expected to spend 30 percent to 40 percent more on actors, directors, producers and other creative talent and rights.

What Makes A Tax Credit "Refundable"?

From Boston.com:

Every tax credit that is introduced is either refundable, partially refundable or non-refundable. What does "refundable" mean?

A refundable credit is a tax credit that can reduce the amount of tax you owe to less than zero. In other words, it can result in a refund where there was not one to begin with. As an example, the newly created $8000 first-time homebuyers tax credit is refundable. If your federal income tax bill without this credit is $6,000, and you qualify for the credit, $8,000 would be deducted from the amount you owe. You would end up with a $2,000 refund.

A non-refundable credit cannot reduce your tax bill to less than zero. The Hope and Lifetime Learning credits are good examples of this. For instance if your tax bill is $1,000 and you qualify for a $1,800 Hope Credit, your tax bill would be reduced to $0 and you would not owe any taxes, but you would not get a refund.

Some tax credits are partially refundable, such as the child tax credit. Taxpayers with income below a certain threshhold receive a larger refundable portion of the credit than those above the threshold.

State Tax Credits Attract Homebuyers

The State of California is beginning to see the light at the end of the tunnel as more people are purchasing new homes. According to the Sacramento Business Journal much of the improvement is because of a $10,000 statewide tax. Check out the text of their article below.

The California Building Industry Association said Monday that the availability of new-home tax credits may have helped boost sales in the Sacramento region and statewide in March.

The association reported figures compiled by Hanley Wood Market Intelligence showed new-home sales in Sacramento during the month were up almost 50 percent compared to February, when 201 homes were sold region-wide. But the total homes of all types sold in the region, 297, was still well below sales of 538 in March 2008.

Since the state credit went into effect March 1, more than 5,600 buyers have taken advantage of the program statewide, which provides up to $10,000 in state tax credits to anyone who buys a newly constructed home or condominium.

The state has already received applications for $54.9 million of the $100 million allocated for the program, the association said, and called for the state lawmakers to expand the program beyond its current limits.

Tax Move Saves Family $1.5 Million

From the Wall Street Journal.com:

The elderly couple weren't even Eileen O'Connor's clients, but she knew they needed assistance.

The husband, a longtime executive at a technology firm near Washington, D.C., had accumulated $6 million in company stock through his retirement plan and an employee stock purchase plan. He was in his mid-eighties and ready to retire. The problem: If he rolled the funds into an IRA, he would be required to take large distributions and pay the subsequent income tax on those withdrawals - which the couple actually didn't need in the first place.

O'Connor, a certified financial planner and vice president at McLean Asset Management Corp., heard about the situation from the couple's adult daughter, who was a client. O'Connor saw an opportunity to take advantage of tax benefits related to closely held stock in a retirement account. Certain employees who own such stock can gain tax benefits by rolling the shares into a taxable account instead of an IRA: The rollover earns a step-up in basis, the taxable account doesn't require minimum withdrawals, and any withdrawals are taxable at the capital-gains rate instead of the significantly higher ordinary-income rate.

To take advantage of those provisions, Internal Revenue Service rules require the employee elect this option before he or she retires. So timing was of the essence for this family - as was compliance with the complex set of IRS requirements related to such transactions.

There was another big issue as well: "Her father was used to managing everything himself, so he started making some of the arrangements on his own," says O'Connor. "Then he dropped dead in the middle of the whole thing."

That's when O'Connor stepped in. Last September, two months after the man's death, she investigated whether the transaction was still possible. Satisfied that it was, she began working nearly full-time on the project, which had to be completed by year end, in partnership with a CPA firm.

Ultimately, O'Connor's solution was to establish two trusts for the family. The first held assets for the wife, who is in her mid-eighties and in poor health. The second was funded with the rolled-over company stock in order to exclude it from the wife's taxable estate and to achieve the step-up in basis. Once the rollover was complete, O'Connor sold all the shares and distributed the proceeds to individual accounts for each of the couple's three adult children.

"It was a tremendous amount of work," O'Connor says." And it made me realize that there's a real opportunity in helping people who have complex estates to settle. There are new assets to be managed, and new planning issues for the beneficiary."

O'Connor's help certainly paid off: By taking advantage of the relatively obscure provisions in IRS code, she helped the family save $1.5 million.

Today, her firm manages assets for each member of the family. "It was a very stressful time for them. They were going through their own adjustments, and then there were all these details to deal with," she says. "It felt really good at the end to have taken care of that for them, and they recognized the value, too. I think they'll be clients for a long time because of it."

Congratulations! Tax Season is OVER!

Whew! You made it past April 15. Time to relax and ignore your taxes until next year, right? WRONG!

Tax planning is a year round endeavor, at least it should be. Here are just a few things you should be doing now to help you keep more money in your pocket, and less in the IRS coffers.

Get Organized!

While all your tax files are still handy, take the time to organize them. Create files for: Income, Medical, Donations, Real Estate, Child Care, Tax Correspondence, Student Loans, Miscellaneous Receipts, Tax Payments, and Archived Tax Documents. And keep the files handy. If it is easier to put receipts and documents in files as throwing them in a pile on the kitchen counter, you might actually still have that receipt next year. Another helpful tip: write down what the expenditure was for, the dates and who was involved, and attach it to the actual receipt. You probably won’t remember every single deductible expense a year from now, so make a note and ensure you get every deduction you’ve got coming to you.
Change Withholdings

Did you get a fat refund this year? Then you may want to adjust your withholdings. I know getting a big check from the government feels good, but wouldn’t that money be more useful to you all year long? With the average refund running around $2,500 that’s $200 a month you could keep in your pocket! Stop giving the government an interest free loan while you struggle to make ends meet. On the other hand, if you found yourself with a big tax bill, consider increasing the amount withheld from your paychecks. Remember that we’re aiming for the “Goldilocks” principal: not too much, not too little, but just right.
Get Educated!

Most people are missing out on deductions and credits they are entitled to, all because they don’t know any better. Americans are so terrified of taxes because they don’t actually know that much about them. Pick up a book, peruse the IRS website, or take a class. By taking some initiative, and learning more you are becoming a better steward of your family’s finances. If that’s not enough to convince you remember, increasing your tax knowledge can save you money!

I promise next tax season will be much easier if you do just these few simple things.

Use Tax Time to Improve Your Financial Life

Earlier this morning I ran across this great article from TheChron.com discussing the ways you can use the time you spend on your taxes to improve your overall finances. You can find a snippet of the post below.

The day after Tax Day is one of relief for many last-minute filers. So I’m going to let you have your day of rest.

But the day after that is one all of us — early birds, deadline beaters and extension filers — need to designate as a new beginning.

April 17, Friday this year, is a good day to start re-energizing our financial lives.

“Tax time is a planning opportunity, not just a reporting opportunity,” said Brent Neiser, a certified financial planner and top executive with the National Endowment for Financial Education in Colorado.

Yes, the tax forms you’re filling out now — or trying to fill out or filed already — report your income, but they also give you much of the information you need to manage your money better.

Neiser’s organization is conducting a survey of tax-filers who use free tax help centers sponsored by the Internal Revenue Service to gauge taxpayers’ understanding of their own financial circumstances.

It’s a literal example of using tax time to improve personal finances that you can follow. Ask yourself:

• What is your family’s income?
• Where, what and how much do you owe?
• When are monthly bills due?
• What are your occasional big expenses?
• What are your fixed expenses?
• What are your controllable expenses?

Plug those answers into the money management worksheets at NEFE’s SmartAboutMoney.org under the resource library link to shape your spending plan and set financial goals.

Next, start researching new tax changes for 2009. The stimulus package has several new laws that will create certain tax benefits for many people. More are likely to follow these.

One in particular to note is the first-time home buyer tax credit.

Taxpayers who buy their first home between Jan.1 and Dec. 1, 2009, can claim a credit of $8,000 or 10 percent of the purchase price, whichever is smaller.

And unlike the version of this credit in place for 2008 home purchases, the credit does not have to be paid back as long as you live in the house for 36 months after the purchase date.

Another thing you should know is for purposes of the tax credit, a first-time home buyer is person or couple who has not owned all or a portion of a principal residence in the United States during the 36 months before purchasing the home for which the credit is claimed.