Schwab Provides Money-Saving Tips to Last-Minute Tax Filers

Thursday, April 2, 2009 8:00 am PDT



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SAN FRANCISCO--(BUSINESS WIRE)--With perplexing codes and confusing forms, it’s no wonder many Americans postpone the inexorable job of preparing their taxes until the last minute. Charles Schwab knows it's not what you make, but what you keep after taxes that count. In these tough times, it’s especially important to take advantage of every tax break to which you’re entitled.

For those filing with less than two weeks to go until April 15, Charles Schwab has several suggestions to help you keep more of your money:

  • Open a new IRA
    Opening an IRA by April 15 allows you to meet the tax-deduction deadline for 2008 IRA contributions. Also remember that for 401(k) plan participants who are recently unemployed, changing jobs or retiring, rolling your retirement savings from an old employer’s retirement plan into an IRA can help maintain the tax-deferred savings status, avoid the taxes and withdrawal penalties associated with early payouts and provide access to more investment choices and more flexible distribution options.
  • Manage College Expenses
    A 529 College Savings Plan provides several benefits; account earnings can grow tax-deferred with Federal tax-free withdrawals and no gift tax is incurred for contributions up to $65,000 ($130,000 per married couple electing to split gifts) for each beneficiary in a single year if an election is made to treat the gift as having been made over five years.
  • Verify Eligibility for the Alternative Minimum Tax
    The taxable income exemption amounts for the 2008 tax year have been raised to $69,950 for married couples filing jointly and $46,200 for single filers.
  • Confirm Required Minimum Distributions
    For 2009, Congress suspended the IRS rule requiring individuals 70½ or older to take annual required minimum distributions (RMDs) from qualified retirement plans. However, for individuals who turned 70½ in 2008, the waiver does not apply to first-year 2008 RMDs made by April 1, 2009.
  • Plan Your Gifts
    The gift tax annual exclusion amount has increased to $13,000 annually (or $26,000 for spouses splitting gifts), with a lifetime gift tax exemption of $1 million, and can be given to any number of people. Also, medical expenses and tuition gifts are unlimited if the provider is paid directly.
  • Plan Your Estate
    The estate tax lifetime exemption amount has increased to $3.5 million ($1,455,800 equivalent credit).
  • Make deductible charitable gifts from your IRA
    Individuals who own an IRA and are 70½ or older can still make tax-free charitable contributions of up to $100,000 directly from their IRA. Congress extended this option through the 2009 tax year.
  • Take Advantage of Federal Income Tax Changes
    The IRS has expanded the federal income tax brackets and increased certain exemptions, deductions and credits to keep pace with inflation. For additional information, please visit:

For More Information

As always, be sure to check with your tax professional for specific advice. Schwab clients are encouraged to reach out to their financial consultant to get more specific advice around their situations, or take advantage of our complimentary consultation. For those who are not yet a Schwab client but would like to learn more, one of our consultants can help. Please call 800-435-4000 to get started.

About Charles Schwab

The Charles Schwab Corporation (Nasdaq:SCHW) is a leading provider of financial services, with more than 300 offices and 7.4 million client brokerage accounts, 1.5 million corporate retirement plan participants, 468,000 banking accounts, and $1.1 trillion in client assets. Through its operating subsidiaries, the company provides a full range of securities brokerage, banking, money management and financial advisory services to individual investors and independent investment advisors. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC,, and affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; referrals to independent fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through its Advisor Services division. The Charles Schwab Bank (member FDIC) provides banking and mortgage services and products. More information is available at (0409-8404)

Before investing in a 529 College Savings Plan, carefully consider the plan’s investment objectives, risks, charges and expenses. As with any investment, it’s possible to lose money by investing in a 529 plan. Additionally, by investing in a 529 plan outside of your state, you may lose tax benefits offered by your own state’s plan.

© 2009 Charles Schwab & Co., Inc. All rights reserved. Member SIPC


Charles Schwab
Lindsay Tiles, 415-667-3997
Jennifer McClellan, 212-704-4567

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