For your 2006 Tax Returns - 10 don't-miss tax breaks

CPA98 http://blog.wenxuecity.com/myblog.php?blogID=23128

This article explainsthe recent changes for 2006 tax return (especially the top 2 items)some of the items have very detailed instructions as where to put downon your returns.

CNNMoney.com

10 don't-miss tax breaks

Wednesday February 14, 11:45 am ET

 

By Jeanne Sahadi, CNNMoney.com senior writer

 

As annual rites go, sweating over your 1040 is one of the most taxing, no pun intended.

Soto make the venture a little more palatable -- and maybe evenprofitable -- we asked Thomas Riley, president of the New York StateSociety of Certified Public Accountants, and Mark Luscombe, principalfederal tax analyst for tax information publisher CCH, to help us drawup a tickler list of valuable (and in some cases new) tax breaks worthremembering before signing off on your federal and state tax returns.

 

1. Get back your phone tax

 

Thanksto the recent repeal of a 3 percent long-distance excise telephone tax,you have a refund coming to you on your 2006 tax return whether youitemize or not.

 

Theone-time refund covers the 3 percent tax that you've paid from March 1,2003 to July 31, 2006. If you don't feel like combing through old billsto tally your total, the IRS will let you claim a standard amount basedon your exemptions:

 

1 exemption: $30 refund

 

2 exemptions; $40 refund

 

3 exemptions: $50 refund

 

4 or more: $60 refund

 

(Ifyou opt for the standard amount, claim it on line 71 on the 1040. Ifyou want to do the calculations yourself, fill out Form 8913.)

 

2. Take credit for being efficient

 

Tax year 2006 is the first for which you can get a tax break for making your home more energy efficient.

 

Youcan take a 30 percent credit up to $2,000 for the cost of solar waterheating or photovoltaic equipment in your home. You can get a 10percent credit up to $500 for insulation and heat-reducing metal roofs,and up to $200 for energy-efficient windows. Labor costs, though, don'tcount.

 

(For more information, see IRS Form 5695. The credit is entered on line 52 on the 1040.)

 

3. Write off the nanny

 

Ifyou work full-time and pay for care of a dependent (e.g., a youngchild, elderly parent or disabled adult child or spouse), you can get acredit for the amount you spend above what you get back through yourcompany's flexible spending account.

 

Dependingon your income, you're allowed to claim between 20 percent and 35percent on up to $3,000 in extra expenses for one dependent or $6,000for two or more. So the maximum credit you can claim would be $1,050for one dependent and $2,100 for two or more.

 

(For more information, see IRS Form 2441 or IRS Publication 503. The credit is entered on line 48 on the 1040.)

 

4. Get money back for saving

 

Savingfor retirement can result in a lower tax bill in more ways than one. Ifyour AGI is $25,000 or less ($50,000 or less for married couples), youmay take up to a 50 percent credit on as much as $2,000 incontributions made to qualified retirement savings plans, such as401(k)s, 403(b)s and traditional and Roth IRAs. The closer you are tothe income ceilings, the lower your credit will be.

 

Thatcredit is on top of the deduction on your income that you get formaking contributions to a 401(k), 403(b) or deductible IRA.

 

(For more information on the saver's credit, see IRS Form 8880. The credit is entered on line 51 on the 1040.)

 

5. A break for self-employed savers

 

Ifyou're self-employed, you may contribute up to 25 percent of yourself-employment income (gross income minus expenses) to a SEP(Simplified Employee Pension) and deduct the full amount.

 

You'reallowed to create and contribute to this IRA-type plan up to the duedate of your return -- which, with extensions, can be as late as Oct.15, 2007.

 

(For more information, see IRS Form 5305A-SEP. The deduction is entered on line 28 on the 1040.)

 

6. Miscellaneous deductions

 

Among the miscellaneous deductions you may be eligible to take:

 

Travelcosts for job interviews: If you interview for a job in your field, youmay deduct the costs of transportation, food and lodging.

 

Phoneuse: You may deduct business calls made on a personal cell phone andwork-related long-distance calls made on your home phone.

 

Subions for work-related publications

 

Dues for professional association memberships

 

Miscellaneousdeductions may be claimed if combined they exceed 2 percent of youradjusted gross income (AGI) and you itemize on your return. But onlythe amount above 2 percent of your AGI is deductible.

 

(For more information, see IRS Form 2106. These deductions are entered on Schedule A.)

 

7. Pick your state tax

 

Youmay either deduct your state and local income taxes on your federalreturn or the state and local sales taxes you paid, whichever ishigher. If you don't have all your receipts, you can use the OptionalState Sales Tax Tables in IRS Publication 600.

 

(The sales tax deduction is claimed by entering "ST" on line 5 of Schedule A.)

 

8. Save on tuition

 

Youcan take a deduction for qualified higher education expenses whetheryou itemize or not. It may be taken on up to $4,000 in tuition and feesif your adjusted gross income is $65,000 or less ($130,000 for jointfilers). If your AGI is higher ($80,000 or less for single filers;$160,000 or less for married couples), you may deduct up to $2,000.

 

Thetuition deduction may not be taken for expenses for which you areclaiming an education credit (e.g., the HOPE or Lifetime Learningcredits).

 

(For more information, see IRS Topic 302. The deduction is entered on line 35 on the 1040.)

 

9. Real estate tax deduction

 

Ifyou bought property and reimbursed the seller for the portion ofproperty taxes he paid for the year, you may deduct that amount on yourreturn, unless you're subject to AMT, which disallows property taxdeductions.

 

(This deduction is entered on Schedule A.)

 

10. Save on 529 savings

 

Somestates offer an income tax deduction to residents for contributionsthey make to a 529 plan. To see if yours does, visitSavingForCollege.com.

请阅读更多我的博客文章>>>

•	For your 2006 Tax Returns - 10 don't-miss tax breaks
•	Triggers for Tax Audit
•	Insurance: What You Need and What You Don't
•	FAQs on the Alternative Minimum Tax
•	Time for a Financial Assessment