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Welcome to this week’s edition of our Tuesday Top 5, Econ4U’s weekly tips post to help you manage your money in five easy steps.

You’re probably not thinking about tax season right now, but fall is a great time to revisit your tax planning strategies. Here are a few tips to make the most of your money before December 31 creeps up on you.

1. Stock up on health supplies. If you participate in a company-sponsored flexible spending account (FSA) for tax-free health expenses, start thinking about ways to avoid leaving money on the table. Stumped about what to get with your dough? Glasses or contacts, cold medicine, first-aid kits, ice packs for treating injuries, and heart-rate monitors all qualify. Drugstore.com even stocks a FSA store full of qualifying goodies. But do it fast: Starting in 2011, you won’t be able to run up a drugstore bill with your FSA dollars. The new health-care law prohibits spending FSA money on anything you don’t have a prescription for (with insulin as the exception).
2. Make your home more energy efficient. Holiday weekends (like the one three days from now) are a great time to buy new appliances at a steep discount. And through the end of the year, you can qualify for a 30 percent credit (up to $1,500) on approved doors, windows, and roofs as well as high-efficiency furnaces, water heaters, stoves, and heating and air conditioning units installed in your primary residence.
3. Save tax dollars when you refinance your home. If you’ve taken advantage of low mortgage rates this year to refinance your home, don’t forget that you can deduct all unamortized points on an old refinancing as well as points on the new loan.
4. Identify charities you want to support. Charitable donations are deductible through December 31 for the current tax year, but pouring money into worthy coffers can be a low priority at year end when you’re busy playing Santa. Make your annual donations now before your wallet starts feeling pinched by the holidays.
5. Begin to max out your retirement savings. If you qualify for an IRA or Roth IRA and haven’t begun making contributions for 2010 yet, start by socking away a little right now. The contribution limit is $5,000 if you’re under age 50, and you have until April 15, 2011 to get it all in there. So put away $625 a month for the next eight months to max the fund out — it will hurt a lot less than trying to come up with $5,000 on Tax Day.

To lure back-to-school shoppers into the mall, many states are offering a sales-tax holiday this weekend, saving consumers money on big-ticket purchases like computers, software, books, apparel, and footwear. Last year, the practice was called into question by certain lawmakers whose districts couldn’t afford to forego the revenue generated by sales taxes. But in 16 states, the tax holiday is back on for 2010.

Here are the five best deals, perhaps even worth traveling for if you have a lot of shopping to do:

1. South Carolina, August 6-8. There is no limit on how much can be spent tax-free on clothing, accessories, shoes, computers, school supplies, software and computer hardware (like printers and scanners), bed linens, and bathroom furnishings.
2. Louisiana, August 6-7. All purchases categorized as “tangible personal property” under $2,500 in value are tax exempt. The only exception is the vehicle licensing tax, if you’ve recently bought a new-to-you car.
3. North Carolina, August 6-8. Items that are tax exempt include computers up to $3,500, school instructional materials up to $350, computer supplies and software up to $250, apparel and footwear up to $100, school supplies up to $100, and sports equipment up to $50.
4. Missouri, August 6-8. Save all sales tax on computers up to $3,500, software up to $350, clothing and footwear up to $100, and school supplies up to $50.
5. New Mexico, August 6-8. Computers up to $1,000, computer accessories up to $500, clothing up to $100, and school supplies up to $100 all qualify for the tax holiday.

Your state not on this list? Check Bankrate for the full list of tax holidays this month.

The secret to wealth building isn’t necessarily stock-market prescience or a brilliant business idea. Everyone starts somewhere, and it’s often just a small decision that snowballs to big rewards. Take one of the following tips and maybe decades from now you’ll remember the day you decided to invest in yourself.

1. Set up automatic transfers to save without the sting. No emergency fund? Not for long. Link a savings account to your checking and set it to automatically deposit $20 every payday. If you get paid every two weeks, in less than two years you’ll have saved $1,000 virtually painlessly (even more if it’s an interest-bearing account). Just remember: No touching!
2. Round up each debt payment. Say today you get a $5,000 car loan at 5 percent, payable over 36 months. Your monthly payment will be $149.85, and you’ll be debt-free in June 2013. Now suppose you round that check up to $200 per month: You’ll get rid of that loan by September 2012 and save more than $100 in interest charges in the process.
3. Get a better interest rate on savings. If your savings account pays peanuts on your money, consider moving it to an online bank. Switching banks over a 1 percent difference in APY may seem like more trouble than it’s worth, but on a $10,000 balance, that ends up being $100 more in your pocket at the end of a year.
4. Trim your housing expenses. If you live in a tri-state area like Washington, D.C., or New York City, you have your pick of which state to live in — which can save you money on a monthly basis if you’re savvy about it. Compare the tax and cost-of-living benefits and drawbacks of each area before you settle down somewhere with a skyrocketing COL.
5. Increase your W-4 allowances. Get a big tax refund this year? Wouldn’t you prefer a fatter paycheck now, rather than waiting until next spring to collect your money back from the government? That’s what we thought. Increase your federal allowances on the W-4 on file at your company and you can put that money to work for you pronto.

If you have a major purchase on the horizon — be it electronics, home furnishings, or a vehicle — now is the time to start considering your options to keep costs low and value high.

1. Know the best time to buy. July is when prices on home wares and furniture reach their annual lowest, as stores mark down goods to attract wedding gift-givers. Shop for a new car at the end of the model year for the best discounts — or at the end of the month, when salespeople are most motivated to make their quotas. A little research can mean big savings.
2. Mull it over. Take your time before you spend big to avoid buyer’s remorse. If your garage already looks like an REI, maybe you don’t need that paddleboard as much as you think you do.
3. Comparison shop to save on taxes. It was news to us that Amazon stocks the full range of laptops and other consumer electronics by all the major brands, from HP to Apple. That could mean more than $100 in savings if you buy online versus going to the mall, where you’d have to pay state sales taxes.
4. Put it on a rewards credit card (with caveats). Getting 1 or 2 percent cash back on a major purchase seems like a no-brainer — unless you’re expecting to carry a balance. Then the interest rate will exceed any rewards you’ve received. In that case, consider paying with cash or negotiating zero percent financing at the store you’re buying from.
5. Determine the value of a warranty. Back to cars again: The conventional wisdom says “always buy used,” because of the steep depreciation value on new cars. But when you buy a new automobile, you benefit from the full warranty — something you may pay a few extra thousand for when considering a certified used vehicle. Crunch your own numbers to see what it’s worth to you.

Tax Day has come and gone, but for certain members of Hollywood’s elite, April 15 was just another Thursday. Too bad debt collectors and the IRS don’t see it that way. While these entertainers earn many times the average household income, they are learning now that a lack of financial knowledge can cost them — big time.

1. Nicolas Cage. This Oscar winner isn’t winning any awards for money management: In January, the IRS came knocking for $14 million in back taxes, and the Bel-Air mansion he tried to sell for $35 million was just repossessed by the bank. But all that didn’t stop him from buying a pyramid in New Orleans last week.
2. Pamela Anderson. Nothing can save this Baywatch star from the California Franchise Tax Board’s tax lien to collect $493,000 in unpaid state taxes. And that’s separate from the $1.7 million she reportedly owes the IRS.
3. Nas. Last October, the rapper from Queens was hit with a tax lien of $2.5 million for unpaid taxes from 2006-7, as well as court-ordered alimony payments to ex-wife Kelis to the tune of $55,000 per month.
4. Lindsay Lohan. The former child star hasn’t had a blockbuster hit in years, but she’s still spending like an A-lister. A snitch reported yesterday that Lohan has charged up $600,000 in credit card debt, and was nearly evicted from her apartment earlier this month for falling behind on her rent.
5. Sinbad. This funnyman isn’t laughing now that the IRS has filed a civil suit against him for failing to pay taxes from 1998 to 2006. The lawsuit alleges he owes $8.2 million to the federal government, plus interest, penalties, and legal fees. And it gets worse: The U.S. Attorney General’s office demanded in February that he sell his $3 million home to make up part of the difference.

Want more? Check out our 8 Worst Celebrity Financial Mistakes feature.

But in case you haven’t, don’t worry, we won’t tell. There’s still time to get them done, and there’s no shortage of resources around the web to help you make it happen.

First of all, if your income for 2009 was less than $49,000, you are elderly, or serving in the armed forces, you qualify for free help from the Volunteer Income Tax Assistance program. To find the location nearest you, visit IRS.gov, or call 1-800-906-9887.

If you’re going to do your taxes yourself, it’s probably worth using a computer program to help make sure you don’t forget any important deductions or tax credits. For example, thanks to last year’s stimulus bill, if you were unemployed in 2009 you can deduct the first $2,400 in benefits you received. Intuit’s perennial best-seller, TurboTax Online Deluxe, is $50, but it could easily pay for itself by preventing any mishaps or mistakes. Other good options include H&R Block’s “At Home” program (also $50), and the no-frills Tax Act Deluxe, which is only $10.

If it turns out you owe more money than you can afford to pay right now, it’s important that you file on-time anyway. The penalty for not filing is far worse than for filing without paying.

Last but not least, don’t forget to file a state tax return in addition to your federal 1040. It’s a common mistake, and can mean missing out on a hefty refund (or, worse, getting nailed with nasty penalties down the line).

Despite success across the pond (he ranks third in Michelin stars) his U.S. company, Gordon Ramsay New York, was forced to hand over his signature New York restaurant last year to settle his financial troubles. And now the New York State Department of Taxation and Finance (DTF) says Ramsay is one of the city’s top 250 “delinquent taxpayers.”

The Daily Dish says DTF is aggressively addressing the tax gap.  The chef owes a reported $250,000 to the state.  But a representative for Ramsay says, “There is an amount still outstanding to the New York State regarding sales tax. We are negotiating through our New York advisors to discharge this debt.”

Wouldn’t it be nice to be able to fall behind on payments, to the taxman or otherwise, and simply have our debts discharged? Fortunately that’s not how our tax system works and DTF seems intent on collecting their due.

Take a lesson from this master chef: Pay your taxes in full and on time (or early). It’ll save you a lot of hassle in the long run.

Then you might want to take a look at the Advance EITC (AEITC).  The IRS has made it possible for qualified taxpayers to receive a little piece of your yearly credit in every paycheck if you meet a few requirements:

1. You are working.
2. You expect your adjusted gross income and earned income will fall within the income limits for the year.
3. You expect to have at least one qualifying child.
4. You expect to qualify for the EITC.

With the Advance EITC you won’t receive all of your credit in your paychecks, but will receive part of the credit from your employer in that form. To get these advance payments you’ll need to use the W-5 Form found here.

Check out IRS.gov for full details on the AEITC requirements.

We’re now less than two months away from April 15th, the day the tax man gets his due. You may not even be thinking about your 1040 yet, but there are some very compelling benefits to filing early. Make your money work for you!

1. Luck favors the prepared. By not waiting until the last minute, you can spend a little extra time finding all the tax credits you’re eligible for. For example, you wouldn’t want to miss out on the Making Work Pay tax credit, which gives single filers an extra $400 and married couples filing jointly $800 (assuming they meet the income requirements).
2. Get your refund faster. This is the obvious one. If you’ve paid too much in taxes in 2009, get the IRS to cut you a check now before the agency is inundated in April and it may be weeks until you see your money.
3. Pay off bills sooner. It’s tempting to use that refund for something flashy and exciting — because hey, found money, right? — but if you put it toward high-interest credit-card balances or student loans, you’ll save yourself some money and get that much closer to living debt-free.
4. Avoid late fees. If you have the time now, it’s better to file your tax return early than risk filing late, especially if you owe (since you’ll have to pay interest on top of penalties).
5. Bring home a bigger paycheck. Now is a good time to review your withholdings. If you’re getting a whopper of a refund back for 2009, consider increasing your federal withholdings — you’ll get a smaller refund next year in return for a bigger paycheck now. After all, why knowingly give the government an interest-free loan?

A perfect example of this is the Earned Income Tax Credit (EITC), a tax credit created to help those who do work, but only make a modest income.  The federal government considers this credit “refundable,” which means you can get a refund check even if you don’t have tax liability.

The biggest problem with the EITC is that many who qualify don’t take advantage of it. But applying for the credit is simple – it just requires filling out a tax return at the end of the year.

Use the chart we’ve put together (using the IRS Income Limits) to see if you qualify.

Basic EITC Qualifications: (For the full list of qualifications visit IRS.gov)

-          Valid Social Security Number
-          Have earned income from employment, self-employment or another source
-          Not using the “married, filing separate” filing status
-          U.S. citizen or resident alien all year
-          Cannot be the qualifying child of another person
-          Adjusted Gross Income and earned income must meet the Income Limits
-          Investment income must be less than the Income Limits

Income Qualifications:

*The income limit applies to your Adjusted Gross Income and Earned Income – each MUST be less than the income limit.

You can also check out the IRS’ EITC Assistant tool here.

Also, be sure to see if you qualify for similar deductions on the state level. Some states also have an EITC credits – see if you qualify!

Check back next week for more Tax Tips!