Somebody recommended me to this forum. I hope that this could be a great source to get some advices. Here is my scenario.

I found out that I owe IRS $5K for year 2009. Last year I got a refund $2K. My husband and I claim zero exemption. Why I still owe 2009 tax? How can I avoid and reduce owing tax FY 2010? For both year 2008 and 2009, we have W-2, $200 interest income, no mortgage, no kids. Nothing changed. Below are tax info. Please help. Thank you.

Year 2009
zero exemption
Status: MFJ
No dependent
Gross income               108,615
Standard deduction    11,400
exemption                    7,300
taxable income            89,391
Total tax                       14,719
Total payment               9,885
Amount owe                4,834

Year 2008
zero exemption
Status: MFJ
No dependent
Gross income               31,653
Standard deduction    10900
exemption                    7,000
taxable income            28,194
Total tax 0
Total payment              2,344
Federal refund            2,344

Thank you.

The reason is, in part, the current administration's Making Work Pay initiative.  Back about a year ago, when they re-calculated the tax tables to give taxpayers their "rebate" in anticipation, they messed up.  The W-4 and withholding formulas were not adjusted for two-income households.

The good news for 2009 is that, since you had no taxes owing in 2008 you will not have an underpayment penalty for 2009.  The bad news for 2010 is that you need to work with your tax return preparer to adjust you withholding this year to avoid an underwithholding penalty at the end of 2010.

For the specific questions you are asking - how to reduce your tax bill - you would be best off using tax preparation software to plan your future withholding.  You can find a couple of different programs to choose from at your local office supply store.

As far as the student loans are concerned, refer to IRS Publication 970, Tax Benefits for Education. http://www.irs.gov/pub/irs-pdf/p970.pdf