Taxpayers have a little more than a month to take advantage of the special 2010 opportunities for saving taxes with Roth Individual Retirement Accounts.

That’s because 2010 delivers special benefits to people who convert their IRAs into Roth IRAs.

Starting in 2010, all taxpayers, regardless of their income level, are allowed to move money from a traditional IRA to a Roth IRA. Before 2010, only people earning less than $100,000 could do that. Beware, the benefit expires at the end of this year, but many believe it will be extended along with a large portion of Bush tax cuts.

But another key benefit is now starting to make the Roth conversion seem even more attractive: That’s the one-time-only offer, good in 2010, to convert from a traditional IRA to a Roth and then spread the resulting tax burden over 2011 and 2012. As many Washington insiders expect income tax rates to remain the same for the next year or so, converts can take advantage by locking in relatively low tax rates on conversions and still defer the tax burden for a year or two.
More on Year-End Tax Tips: Saving Taxes With A Roth IRA

The Internal Revenue Service is getting reports that some tax preparers are telling customers that their stimulus checks are taxable.

But the IRS has clarified that the stimulus payments will not reduce your 2007 or 2008 refund, nor will they increase the amount you owe when you file your 2008 return.

The confusion apparently has surfaced with various income tax software packages.  It asks filers to report the amount of their check to determine if they are eligible for the new recovery rebate credit.  So if you use tax software, be certain to check that the program is not calculating tax on stimulus payments.

Taxpayers who did not receive a stimulus payment may be eligible for a recovery rebate credit.

Do you have questions about the economic stimulus payments?  Did you miss the Oct 15 deadline to file?  Can you still file anyway? Here are the top five questions currently being asked about the stimulus payments.

Address Change
1. I have moved since filing my 2007 tax return. How will my payment reach me?

A. Filing Form 8822, Change of Address, with the IRS and a change of address notice with the U.S. Postal Service will help ensure that any mail from the IRS, including your stimulus payment check, is sent to your new address. If the check has already been mailed and you did not provide the IRS with an updated address, the check will most likely be returned to the IRS. You may call the IRS at 1-866-234-2942 to provide your new address so that steps can be taken to have the check reissued.

Payment Timing
2) When will I get my stimulus payment?

A. It will generally take 8-12 weeks after you file your return to get your stimulus payment.

The IRS has already issued stimulus payments, both direct deposits and paper checks, for most returns filed by April 15. The IRS will continue to issue payments through 2008 for returns filed after April 15. Please allow 8-12 weeks after filing your tax return before checking on the status of your stimulus payment. To check on the status of your stimulus payment, you may visit Where’s My Stimulus Payment?or call the toll-free Rebate Hotline at 1-866-234-2942.

3) It has been more than eight weeks since I filed my return and my payment has not arrived. Can the IRS trace my payment to find out what happened to it?

A. Yes. If it has been more than eight weeks since you filed your return and your payment has not arrived, please visit an IRS Taxpayer Assistance Center or call the toll-free Rebate Hotline at 1-866-234-2942. A list of all Taxpayer Assistance Centers in your state is available at Contact My Local Office.

4) I heard that the IRS has finished sending the stimulus payments. Is it too late to for me to claim mine?

A. If you missed the Oct. 15 deadline for filing an income tax return for a economic stimulus payment, don’t worry. You can receive a payment in 2009 by filing an income tax return when the filing season opens in January. The IRS will have more information shortly.

5) I filed after April 15 and the payment date for my Social Security number has passed. How long will it take for me to get my stimulus payment?

A. It will generally take 8-12 weeks after you file your return to get your stimulus payment.

truetaxfacts.com will continue to provide updates on important information regarding the IRS and the economic stimulus payments. 

source: irs.gov