Everyone who makes enough money to actually pay taxes dreads filing taxes in the spring. However, even some people who make a considerable amount of money will get a good tax return because they know how to play the game. Even if some people don’t get a return at all, they may end up breaking even with the government.

No monetary exchange either way during tax season is definitely better than having to write the government a fat check! Here are a few ways that you can ensure you get the best possible tax return.

Be a Proactive Tax Payer

One way to ensure that you get a better tax return is to start organizing and calculating your tax information before the end of the year. This way, you’ll be able to get in on last-minute deals and gifts that may help your taxes at the beginning of next year. After December 31st, it’s too late, so it’s best that you don’t procrastinate and that you get to your taxes by the beginning of December, at least.

Get Organized!

You can also help yourself out by being organized throughout the whole year. Depending on your situation, there are different things that you can write off. For example, people who work for an employer still need to keep home improvement receipts, investment records, and records of their charitable donations.

If you’re self-employed and work from home, you need even more, including rent or mortgage statements, office supply receipts, and even bills for your internet, which can all be written off on some level for most self-employed people.

Fatten Up Your IRA

If you have an IRA, you need to maximize your contributions to it as much as possible because they’ll get you tax breaks. You can actually claim contributions to your IRA on last year’s taxes up through mid-April, so this is something that you can catch up on even if you’ve been procrastinating.

Giving Benefits

Finally, be sure that you’re correctly tracking and recording your charitable donations. Making donations to non-profit organizations is a great way to give back to your community even while receiving tax benefits, but you have to record these donations correctly. For instance, some companies incorrectly write down charitable donations as business expenses, which can create problems in the tax world.

Also, if you’re giving something valued over $500, be sure that you get a proper appraisal and receipts from the charitable organization so that you can legitimately claim the whole amount on your taxes.

Here’s a few fine print details regarding the bonus:

• To receive the cash credit, you must open a new Power E*TRADE account by December 31, 2009, and deposit funds or securities from an external bank or brokerage account within 45 days.
• This offer is not valid for IRAs, other retirement, business, trust, or E*TRADE Bank accounts. E*TRADE FINANCIAL Corp. associates, and non-U.S. residents are not eligible.
• New funds or securities must remain in the account for a minimum of 6 months or the credit may be surrendered.
• One promotion per customer.

Here’s the breakdown of the payout:

Click Here to read more about the promotion.

A Roth IRA is an Individual Retirement account (IRA) allowed under the tax law of the United States. Named for its chief legislative sponsor, Senator William Roth of Delaware, a Roth IRA differs in several significant ways from other IRAs.

The total contributions allowed per year to all IRAs are limited as seen below (this total may be split up between any number of traditional and Roth IRAs. In the case of a married couple, each spouse may contribute the amount listed):

*Starting in 2009, contribution limits will be assessed for a potential increase in $500 increments based on inflation, though the 2009 contribution limits have remained unchanged.

Advantages

• All contributions and earnings held in a Roth IRA may be withdrawn tax free after the “seasoning” period and age 59½. Dividend and interest earnings within a traditional IRA are taxed as Ordinary Income even if the monies were invested in stocks or mutual funds, and a penalty applies for withdrawals before age 59½. In contrast, stocks or mutual funds held in a regular taxable account for at least a year would be taxed at the lower long-term capital gain rate, currently only 15%. This higher tax rate for withdrawals from a traditional IRA is a quid pro quo for the deduction taken against ordinary income when putting money into the IRA.
• If there is money in the Roth IRA due to conversion from a traditional IRA, the Roth IRA owner may withdraw up to the total of the converted amount, as long as the “seasoning” period (currently five years) has passed on the converted funds.
• Direct contributions to a Roth IRA (i.e., not including rollovers) may be withdrawn at any time with no tax or penalty, since they have already been taxed.
• Up to $10,000 in earnings withdrawals are considered qualified (tax-free) if the money is used to acquire a principal residence. This house must be acquired by the Roth IRA owner, their spouse, or their lineal ancestors and descendants. The owner or qualified relative who receives such a distribution must not have owned a home in the previous 24 months.
• Contributions may be made to a Roth IRA even if the owner participates in a qualified retirement plan such as a 401(k). (Contributions may be made to a traditional IRA in this circumstance, but they may not be tax deductible.)
• If a Roth IRA owner dies, and his/her spouse becomes the sole beneficiary of that Roth IRA while also owning a separate Roth IRA, the spouse is permitted to combine the two Roth IRAs into a single account without penalty.
• If the Roth IRA owner expects that the tax rate applicable to withdrawals from a traditional IRA in retirement will be higher than the tax rate applicable to the funds earned to make the Roth IRA contributions before retirement, then there may be a tax advantage to making contributions to a Roth IRA over a traditional IRA or similar vehicle while working. There is no current tax deduction, but money going into the Roth IRA is taxed at the taxpayer’s current marginal tax rate, and will not be taxed at the expected higher future effective tax rate when it comes out of the Roth IRA.
• The Roth IRA does not require distributions based on age. All other tax-deferred retirement plans, including the related Roth 401(k), require withdrawals to begin by April 1 of the calendar year after the owner reaches age 70½, If you don’t need the money and want to leave it to your heirs, this is a great way to accumulate income tax free. Beneficiaries who inherited Roth IRAs are subject to the minimum distribution rules.
• Since a Roth contribution has already been taxed, it may be equivalent to a larger contribution to a traditional IRA that will be taxed upon withdrawal. For example, a contribution of the 2008 limit of $5,000 to a Roth IRA may be equivalent to a traditional IRA contribution of $6667 (assuming a 25% tax bracket at both contribution and withdrawal). In 2008 you cannot contribute $6667 to a traditional IRA due to the contribution limit, so the post-tax Roth contribution may be larger. However, many people end up in a lower tax bracket in retirement, or, the effective tax rate applicable to their traditional IRA withdrawals in retirement will be equal to or lower than their marginal tax rate while working, and they will not realize this benefit.

I practice what I preach, so go on, get in your car and go open an account, or try a online broker like E*trade .