Author: Natalie Aranda
Source: articledashboard.com
Every year, the IRS changes some of the specifics for tax deduction and they usually don't inform the national public about the detailed changes so people are usually left to just buy new software like Tax Cut or Turbo Tax. There are many changes like adjustments for inflation that increase the standard deduction and widen the tax brackets that are easy to spot, but there are other subtle, income tax bracket, changes that are less obvious. It might make you angry to find out that some of the changes aren't even on the 2006 tax forms because they were made so late.
In order to insure that you get the maximum deduction that you deserve, you need to follow some specific tax filing procedures to obtain them. For state sales tax, college tuition and educators' expenses, Congress changed the deductions for these specific issues last December, but they aren't on the forms. You are now able to get deductions on these expenses based on the new changes. Also, if you are the kind of person that likes to get their taxes done early, you will have to wait until after February 3rd because the IRS will not be able to process returns until after this date. Electronic submissions of returns will be disregarded by the IRS and paper returns will be set aside until the 3rd. You will want to save your free efile until after that date.
Other changes that might save you money include phone tax refunds, hybrid car tax credits, residential energy credits, bigger adoption credits, and a few other things that are geared more towards companies and upper class income earners. The government has stopped collecting the excise tax on long distance phone calls because phone plans do not charge their plans based on distance. Also, if you buy a hybrid car during 2006, the government will give you a 3,400 dollar tax credit for your contribution to society. If you decided to use alternative fuels like solar energy to heat your home, you can deduct 30% of that along with 10% for the cost of skylights, outside doors, and windows. If you decide to adopt a child this year, you and your family can deduct up to 10,960 dollars.
Make sure to catch these new changes on your tax returns because these are not small deductions that don't matter much. When you are working on your tax preparation this year, don't forget to research how to get back as much as possible on your tax returns.
