If both you and your spouse work and both have taxable compensation, each of you can contribute up to $2,000 (or the amount of each IRA owner's compensation, if less) to a separate IRA. Even if one spouse has little or no compensation, up to $2,000 can be contributed to each IRA if combined compensation is at least equal to the amount contributed to both IRAs. You can contribute $2,000 to a separate IRA for your nonworking spouse if you file a joint return. Your total contribution to both your IRA and the spousal IRA for this year is limited to $4,000 or your taxable compensation, whichever is less. You cannot contribute more than $2,000 to either IRA for the year.

Can I deduct alimony paid to my former spouse?

If you are divorced or separated, you may be able to deduct the alimony or separate maintenance payments that you are required to make to your spouse, former spouse, or on behalf of that spouse.

I own stock which became worthless last year. Can I take a bad debt deduction on my tax return?

If you own securities and they become totally worthless, you can take a deduction for a loss, but not for a bad debt.

The worthless securities are treated as though they were capital assets sold on the last day of the tax year if they were capital assets in your hands. Report worthless securities on line 1 or line 9 of Schedule D (Form 1040), whichever applies. In columns (c) and (d), write "Worthless."

I am considering a tax shelter investment. How can I tell if the tax shelter is an abusive tax shelter?

An abusive tax shelter is a marketing scheme that involves artificial transactions with little or no economic reality. Generally, you invest money to make money. An abusive tax shelter offers you inflated tax savings based on large write-offs and credits; it is often out of proportion to your investment. An abusive tax shelter exists solely to reduce taxes unrealistically, and thus receive an economic benefit. A legitimate tax shelter exists to reduce taxes fairly and also produce income. As in any investment, a real tax shelter involves risks, while an abusive one involves little risk, despite outward appearances. Abusive tax shelters are often marketed in terms of how much you can write off in relation to how much you invest. This write-off ratio is frequently much greater than one-to-one. A series of tax laws has been designated to halt abusive tax shelters.

I moved to a different state to accept a new job. Will I be able to deduct all of my moving expenses?

If you moved because of a change in your job location or because you started a new job, you may be able to deduct your moving expenses. To qualify for the moving expense deduction, you must meet two tests: distance and time. You can only deduct certain moving expenses that were not reimbursed by your employer.