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• Tis better to give than to receive - A new law allows people who give money to charities helping victims of the earthquake in Haiti to deduct the contributions on their 2009 taxes. The money needs to be donated before March 11, 2010, and the gifts must be specifically for the relief of the Haitian earthquake victims. For example, a contribution to a charity’s annual fund drive won’t count. To prove that you have made a contribution, you need a cancelled check or a receipt from the charity. Donations made via text message will be recorded on your mobile phone bill.
• Movin’ on up - If you are house hunting, it’s not too late to take advantage of the homebuyers’ tax credit of up to $8,000. The other good news is the tax credits are no longer limited to first-time buyers – they have been expanded to include other groups. If you purchase a home this year, you can claim the credit on your taxes for 2009 or 2010. A professional tax provider can provide more information, or homebuyers can visit www.irs.gov for more details on the rules. “Even if you haven’t yet started your 2009 taxes, you should be thinking about the best tax-reducing strategies for 2010,” says Ellington. “If you wait until it’s time to file, you’ve missed some great money-saving opportunities that you are entitled to enjoy.”
• Go to a pro -  No, we don’t mean a professional tax preparer, necessarily. First start with advice that’s free – visit your workplace human resource professional to see if your paycheck withholdings are allocated appropriately. “I have worked with clients who do not have the discipline to put away money, and they use Uncle Sam as a savings account,” said Ellington. “But if you are receiving significant refunds from the IRS, then you are giving the government a no-interest loan. It would be better to have extra cash in your paycheck to save, invest or pay off debt.” Ellington says a human resource professional can provide advice on claiming deductions so you can keep more of your money in each paycheck, but still avoid being slapped with a large tax bill. They can also answer questions about other tax-reducing opportunities such as 401(k), flexible spending and health savings accounts. Professional tax preparers are expensive, but they can be a huge help in preparing your taxes, especially with seemingly ever-changing tax laws. They also can provide counsel on reducing tax liability for the future.
• Tax-free money
  • Retirement Plans - “If you aren’t contributing to your company 401(k) or another retirement plan, you are missing out on an opportunity for a tax savings,” said Ellington. “Talk to your human resource professional about appropriate levels to contribute based on your financial needs and if your company provides a match.” Contributions to a 401(k) are exempt from state and federal taxes and will grow tax deferred until retirement.
  • Contribute to a Flexible Savings Account or Health Savings Account - Contributing to a Flexible Savings Account (FSA) allows you to use pre-tax dollars on IRS-approved medical expenses not covered by your insurance. This can include things such as co-pays, some premiums and even over-the-counter medications and contact lenses. Here’s how an FSA works: A fixed amount of money is taken out of your check each month and put in an account to be repaid to you when you submit paperwork for expenses. Some FSA providers now offer debit cards that eliminate the paperwork needed for reimbursement. A disadvantage of FSAs is that if you do not use the money set aside for medical expenses, you lose it. Health Savings Accounts (HSA) are available to people who have a high deductible insurance plan and work much like the FSA. The money you save on higher premiums is placed in a special account to use for medical expenses until you meet your deductible, and the insurance provider starts to pay your bills. You get to keep any money you don’t spend, and it grows tax deferred until retirement.
• Write-off with a heart -  Taking advantage of charitable deductions does not require writing a six-figure check to a nonprofit. Think about everything in your closets that you don’t wear or use anymore – those items could save you money on taxes while helping someone in need. “Donating clothing, electronics or furniture is an easy way to save a couple hundred dollars on taxes,” said Ellington. “It’s what motivates me to clean out the garage and basement every spring.”