The $700 billion bailout plan will give you tax credits for helping save the environment. This means that going green for the year 2009 will give you as much as 30% incentive for buying and installing a solar energy system. You will even receive up to $4,000 for the purchase and installation of a windmill energy saving system for your home. Credit worth $1,500 will also be given if your home features energy efficient appliances such as water heaters, as well as windows, doors, roofs, and insulation.

If you sell your home and make a profit, you can also get a tax deduction, particularly if the home you have just sold has been in your name from between two to five years. If you are single, you are free from being taxed on a profit of $250,000 and below, while married couples who sell a whole with at least a $500,000 can get away without being taxed at well. You will also get tax savings if you have unloaded your home due to job loss, health issues, or unforeseen events such as death or divorce.

If you are buying your very first home, you are entitled to a tax credit of as much as $7,500 if you have an annual income of $75,000. Not having owned a home for the last three years will also fall to your advantage in the tax savings department, as you can bring home tax credits of up to 10% of your new home’s price. Tax law can be complicated, so it’s important to keep yourself informed and take advantage of everything that’s available to you.

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If you want to avoid paying taxes now, you will want to move your funds from one 401k account to another by performing a direct rollover. This means you do not see the money and your previous and new retirement accounts will take care of the transaction for you.  Of course there will be paperwork involved on your end. Don’t think it’s going to be that easy!  If you directly rollover your funds you will avoid any taxes and penalties.

Should you decide to have your previous employer write you a check for your current 401k balance and you want to personally deposit this check into a new 401k account, you will be hit with a few taxes and potential penalties. The first tax you will see will be the 20% mandatory federal income withholding tax. Your current retirement company will automatically take out 20% and give you a check for 80%. You have 60 days to pay all of this money back.  Should you miss the 60 day deadline you may also incur a 10% penalty because you withdrew your retirement funds early. The state and federal governments will treat your cash in hand retirement check as income. That is why it is so important to redeposit it within the 60 days, or more importantly, not touch it at all and let the two companies handle the transaction.

There is nothing worse than throwing money away and if you do not handle your401k rollover properly you will be throwing money away. Taking money from your retirement fund before your ready to retire defeats the purpose, so to stop you from temptation keep in mind that you will be taxed!

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