Tax refund rules change when you are job hunting

Tax time is a hoot on the unemployment line.

A guy named Ray Conejo in Kissimmee, Fla., apparently is using his refund to help pay for his bankruptcy filing this year. And late night TV tax doyen Roni Deutch points out, accurately, that it's easier for some of us to qualify for bigger refunds this year. With our reduced incomes, more of what we spent in 2008 bumps above the 7.5 percent of adjusted gross income threshhold that is tall cotton to itemizers.

It's a mixed boon. Like saving on shampoo because you are bald, quips Deutch

Kitchentablenomics.com crunched tax numbers this weekend. Our refunds are going to outrun our balances due by about $150. The really good news, when you are on a lean budget like ours, is that we don't owe. The not so good news is that unemployment benefits and other part-time income mean more tax work before April 15. We need to file estimated and self employment taxes too because our withholding is way down.

But what do we do with the $150 windfall? The basic advice that personal finance writers shovel out still works. Pay debts and stash as much as you can. But priorities change. We're more into stashing these days.

And whether you are employed or not, it's time to start planning for next year.

IRS tells homebuyers, we can wait.

IRS Commissioner Doug Shulman recently offered homebuyers advice that I don't remember hearing ever come out of a tax chief's mouth before.

Don't file your taxes too quickly if you plan on claiming a new first-time homebuyers credit, Shulman urged taxpayers recently. Check out your options and think about asking for a six-month filing deadline extension, to Oct. 15, if that works out better for you, he said. You do need to file that request by April 15, however.

Briefly, singles can claim a dollar-for-dollar tax reduction up to $4,000 - and married couples can claim up to $8,000 - buying a home this year if they haven't owned one in the last three years.

Falling home prices and a crocus-like bloom in late winter home sales may make this an even better deal for first-time buyers. H&R Block offers a rundown of the key points to consider about the tax credit, as well as similar, but less attractive credit for purchases in 2008.

But weigh your filing choices too, Shulman suggests. Waiting until Oct 15 to file, if you buy a home before then, may get your tax credit into your hands faster than waiting until you file your return for 2009 a year from now. Or, if you've already filed, filing an amended return after you buy could do the same things. But you also can wait a year and claim the money on your return for 2009 if you think the tax reduction might do more good then.