| As April 15th draws every closer, it is time to start | | | | déjà vu. It has been around since 2004, |
| thinking about how you are going to reduce your tax | | | | but was set at the end of 2005. Fortunately, it has |
| bill. Here are a couple of ways most people miss out. | | | | been renewed. If you itemize deductions, you can |
| Every year, the IRS tries to alert people to new | | | | choose to deduct the total state and local sales tax |
| deductions and credits available to taxpayers. Some | | | | instead of the state income tax. This is a windfall for |
| might argue the IRS doesn't make much of an effort, | | | | people that made big purchases such as luxury cars |
| but that is beside the point. In truth, it sends out news | | | | or live in a state where income tax is not collected |
| releases and so on. Here are some of the areas | | | | such as Florida. |
| where you can save on your 2006 taxes that you | | | | Home Improvement Tax Credits - If you installed |
| might not know about. | | | | energy efficient products on your home in 2006, you |
| Telephone Excise Tax Refund - For the last 108 | | | | can claim a nice tax credit. The products, such as |
| years, the IRS has collected a long distance tax. Don't | | | | windows, doors and appliances, have to be approved |
| remember paying it? Well, this is because your phone | | | | for the tax credit. The exact amount of the credit |
| service was doing it as part of your bill. Much to the | | | | depends on the product, but can be as high as $500. |
| embarrassment of the IRS, the tax has been ruled | | | | While this may not sound like a lot, keep in mind tax |
| illegal over and over by courts. The IRS has finally | | | | credits are applied directly to the amount you owe the |
| given in. Does this mean you get a refund for the last | | | | government one you figure out your taxes. This dollar |
| 108 years? No. Instead, you can claim a $30 or $60 | | | | for dollar reduction makes them much more valuable |
| refund on your 1040. The box is line 71 on the 1040 | | | | than a mere tax deduction. |
| form and line 42 on the 1040A and 1040EZ forms. | | | | As we head full steam into the tax season, most |
| Alternatively, you can go rifle through your phone bills | | | | people start to worry about filing their taxes. If you |
| and file form 8913. | | | | keep the above credits and deductions in mind, it |
| State and Local Sales Tax Deduction - Mention of this | | | | should prove to be less painful. |
| deduction may bring on a sense of | | | | |