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Review your investments.If your stock portfolio suffered significant declines in 2006, investors with losses or potential losses should consider their tax opportunities. From a tax point of view, net capital losses up to $3, 000 can reduce your income for 2006. Those in excess of $3, 000 won't reduce this year's income, although they can be "carried forward" to 2007 and later years. Invest in retirement.Even if your income and deductions are pretty well set for 2006, contributions to certain retirement plans can still reduce the size of the check you write next April, or increase the size of the check you receive. If your employer does not offer a retirement plan where you work, consider making a tax-deductible IRA contribution that can impact your 2006 tax bill by reducing your all-important adjustable gross income. Participate in an employee benefit plan.The closing months of the year are often "open enrollment" periods for employee benefit plans that can reduce your taxes for next year, if not this one. Making the choice now to pay for health or dependent care expenses on a pre-tax basis and contributing to a 401(k) next year will directly lower your taxable income for 2007. Tax Guide 2008 Tax Planning Basics Tax planning is a process of looking at various tax options in order to determine when, whether, and how to conduct business and personal transactions so that taxes are eliminated or reduced. There are countless tax planning strategies available, particularly if you own a small business. For more details, read The Basics of Tax Planning. Tax News 2007 Social Security and Self-Employment Tax Rates The IRS is committed to doing more audits, and better audits, in an effort to clamp down on unreported and underreported income, known as the tax gap. But ultimately, audits alone are not the answer. For further details, please read Gov't Can't Audit Its Way Out of Tax Gap: IRS Official. New Standard Mileage Rates The IRS has released the new 2007 figures for determining various standard mileage rates for tax purposes. To learn more, please read Standard Mileage Rate Unveiled for 2007. Expired Tax Provisions With the 2006 tax year rapidly drawing to a close, this is a great time to do some last-minute tax planning. Of course, this assumes that you know all the tax rules needed to make informed decisions. Unfortunately, navigating through the tax world can be extremely difficult when important tax updates are unreasonably delayed. This certainly applies in the case of a number of important tax provisions that await legislative resurrection after expiring at the end of 2005. For more on this story, please read Failure to Renew Expired Tax Extenders Subject of Concern, Debate. Social Security Payments Increase Social Security taxes are on the rise, for some people at least. The amount of Social Security tax you'll be paying for 2007 may be higher than for 2006, depending on how much you make, but the actual tax rate really hasn't changed a bit. To learn more about the tax hike, please read Social Security, Self-Employment Taxes Set for 2007. Income Tax Preparation GainsKeeper Compatible Tax Tips Newsletter Continuing our effort to provide you with valuable tax information, we will periodically update this page with useful tips and information on issues that you commonly deal with. Sign up for our Free E-mail Newsletter E-mail Address: A New Tax Year Means New Tax Changes to Consider Like the weather, our tax laws are subject to frequent changes. Unfortunately, there continue to be many traps for the unwary and uninformed taxpayer. Here are some highlights of changes in effect for the 2006 filing season: Personal exemption amount. This amount has increased to $3, 300 per person for 2006. Standard deductions. Standard deduction amounts have increased for 2006 as follows: singles and married filing separately, $5, 150; heads of household, $7, 550; married filing jointly, $10, 300. State and local general sales tax deduction. Through the end of 2007, individual taxpayers may still elect to deduct either state and local income taxes or state and local general sales taxes as an itemized deduction on their federal income tax returns. Credit for federal telephone excise taxes paid. For 2006 only, individual taxpayers may request a telephone excise tax refund via their Form 1040. The standard refund amounts depend on the number of exemptions claimed and can be as high as $60 for four of more exemptions claimed. Tax Guide 2008 Deciding Who Must File an Income Tax Return If you're reading this material, you probably don't have any doubt about whether you need to file a tax return. To remove any residual doubts you may have, though, please read Who Must File a Return Choosing the Right Individual Income Tax Form When it comes to federal income tax forms, there are three basic versions available to individuals: Form 1040, Form 1040A, and Form 1040EZ. There are rules for each of these forms regarding the taxpayers who can or must use it. To find out which individual tax form applies to your situation, read Which Tax Form Should You Use Tax News Tax Return Changes Highlighted Taxpayers will notice some changes in filing their 2006 tax returns, and the IRS is trying to educate filers ahead of time. For further details, please read IRS Officials Highlight Tax Return Changes for Individuals. New Federal Tax Legislation The House of Representatives overwhelmingly approved comprehensive tax, healthcare and trade legislation on December 8, 2006, meeting an election year promise to extend a group of expiring tax provisions before the 109th Congress adjourns. For a closer look at the new tax law changes, please review Final Tax Package Extended; Congress Adjourns. New Options for IRA Funding When calculating your annual income taxes before the April 15 deadline, certain filers have the option of sheltering some additional income, tax-free, in an Individual Retirement Account (IRA). And even though the calendar has turned to a new year, that IRA contribution is considered valid for the tax year that just ended. But with all the holiday spending and likely increases in health coverage premiums for the new year, where do you actually find the money to make that tax-advantageous IRA investment Thanks to new federal legislation, you may have another source for funding your deposit--your tax refund. For more on the new tax law changes, take a look at New Pension Law Allows Tax Return-Funded IRAs. Tax Audits Discussed The IRS is committed to doing more audits, and better audits, in an effort to clamp down on unreported and underreported income, known as the tax gap. But ultimately, audits alone are not the answer. For further details, please consult Gov't Can't Audit Its Way Out of Tax Gap: IRS Official. Tax News Archive For more news stories and features on federal, state and payroll tax issues and how they may affect you, read the listing of articles in the archive. Tax Tips Newsletter Archive To read newsletters from previous months, browse the Tax Tips Newsletter Archive. CompleteTax Advantages Income Tax Preparation GainsKeeper Compatible Tax Tips Newsletter Continuing our effort to provide you with valuable tax information, we will periodically update this page with useful tips and information on issues that you commonly deal with. Sign up for our Free E-mail Newsletter E-mail Address: Remember to Love Thy Spouse This Tax Season If you were to believe the candy and greeting card industries, February is the month to celebrate love. It seems appropriate, therefore, that this month we consider how love and marriage and taxes go together. Tax Guide 2008 Tax Credits and Other Issues for Families Closely related to the discussion of marital status, there are a number of special tax breaks based on your family situation. For more on this topic, please read Tax Credits and Other Issues for Families. Deciding Who Must File an Income Tax Return If you're reading this material, you probably don't have any doubt about whether you need to file a tax return. To remove any residual doubts you may have, though, please read Who Must File a Return Choosing the Right Individual Income Tax Form When it comes to federal income tax forms, there are three basic versions available to individuals: Form 1040, Form 1040A, and Form 1040EZ. There are rules for each of these forms regarding the taxpayers who can or must use it. To find out which individual tax form applies to your situation, read Which Tax Form Should You Use Tax News Tax Filing Deadline Extended The IRS has announced that taxpayers will have until Tuesday, April 17, 2007, to file 2006 individual tax returns (and certain other forms) and pay any taxes due. For more on this story, please read Income Tax Filing Deadline Changed by IRS. New Tax Laws to Consider Taxpayers will notice some changes in filing their 2006 tax returns, and the IRS is trying to educate filers ahead of time. To discover how recent tax developments may affect your situation, take a look at IRS Officials Highlight Tax Return Changes for Individuals. The IRS has urged taxpayers to check to see if they qualify for the telephone excise tax refund before filing their 2006 tax returns. The IRS implemented the telephone tax refund program when it determined that federal law did not authorize it to collect excise tax on long distance telephone service. The refunds are of tax that was previously collected from March 2003 through July 2006 without proper statutory authorization. According to the first weekly filing statistics released this year, as of February 16, more than 10 million taxpayers, or roughly 30 percent of all taxpayers, failed to request the refund. Amazingly, according to IRS Commissioner Mark W. Everson, nearly half of those returns (over 4.8 million) were completed by a tax return preparer. "We are surprised how many tax preparers are overlooking the telephone tax refund, " Everson stated. "We want all taxpayers entitled to this refund to get it, whether they are using a tax preparer or doing the return themselves." The IRS offered the following tips to help taxpayers figure their refund properly and get it quickly:

• file electronically;
• for taxpayers whose income is $32, 000 or less, file for free using Free File;
• choose direct deposit;
• consider using the standard refund amount, ranging from $30 to $60, for the telephone-tax refund;
• if claiming the actual amount of telephone excise tax paid, (a) base the refund request on the three-percent federal tax paid and not the total phone bill, (b) do not count tax paid on local-only service, and (c) do not include phone bills or other records with the refund request but, instead, retain these documents in case the IRS questions the requested amount;
• do not file duplicate requests, i.e., if filing a regular income tax return, do not file Form 1040EZ-T, which is designed exclusively for requesting the telephone tax refund by individuals who do not need to file a regular income tax return;
• avoid tax preparers who make false claims that many, if not most, phone customers can get hundreds of dollars or more back under this program; and
• use the Telephone Excise Tax Refund section on the front page of the IRS website (irs.gov).

Other statistics released by the IRS show a nearly three-percent increase in e-filed returns, and a seven-percent increase in e-filed returns prepared on home computers, compared to early filings last year. Also, the average tax refund through February 16 is $2, 733, which is almost $100 more than last year. IRA Contributions A traditional IRA is an extremely versatile and simple way to save for retirement. An IRA is also a good way to lower your 2004 tax bill at the last minute, even after the official tax year has ended. For more on this topic, please look at Contributing to Your IRA. Deciding Who Must File an Income Tax Return If you're reading this material, you probably don't have any doubt about whether you need to file a tax return. To remove any residual doubts you may have, though, please read Who Must File a Return Tax News Tax Gap Reduction Addressed The IRS is working on ways to address the underpayment of taxes known as the tax gap: the difference between what taxpayers owe and the actual amount they pay. This difference is caused by a number of factors, some nefarious and intentional, others not so much. To learn more about this development, please read IRS Continues Work on Reducing Tax Gap. Tax Filing Deadline Extended The IRS has announced that taxpayers will have until Tuesday, April 17, 2007, to file 2006 individual tax returns (and certain other forms) and pay any taxes due. For more on this story, please read Income Tax Filing Deadline Changed by IRS. Free Filing Program Well it's that time of year again--time to sit down, crunch the numbers and figure out just how big of a bite Uncle Sam wants from your annual income. And to add insult to injury, you also may have to pay someone for this privilege--unless you check in with the IRS first. For more details, please see IRS Touts Program for Free Filing of Tax Returns. Income Tax Preparation GainsKeeper Compatible Tax Tips Newsletter Continuing our effort to provide you with valuable tax information, we will periodically update this page with useful tips and information on issues that you commonly deal with. Sign up for our Free E-mail Newsletter E-mail Address: Extension to File Individual Income Tax Return Although the 2006 tax filing season is not yet over, taxpayers who think they won't make the April 17th deadline need not despair. There are certainly many more related issues to consider. For additional details on automatic extension requirements for individual taxpayers, begin filing an extension. Tax Guide 2008 Standard and Itemized Deductions To itemize or not to itemize That is the question taxpayers face every year when preparing their annual tax returns. Whether it's nobler (or at least more beneficial) to use the standard deduction or to itemize deductions is a matter of taking a closer look at your deductible expenses and doing some number crunching. For more on this topic, please read Standard and Itemized Deductions. Business Deductions If you operate a small business, you want to make sure you are taking advantage of every possible tax deduction available. This is especially true this year because of the many recent tax changes enacted at the end of last year. To explore this topic further, take a look at Business Deductions. Claiming Tax Credits Besides taking care to claim all the tax deductions that you can, you can minimize your income tax bill by claiming all the tax credits available to you. When they're available, tax credits are generally better for you than deductions would be, because credits are subtracted directly from your tax bill. Deductions, in contrast, are subtracted from the income on which your tax bill is based. To get more information, please review Claiming Tax Credits. Penalties for Underpayment or Late Returns What happens if you don't file a tax return or pay taxes that you owe by their due date Generally, in this situation the IRS will send you a notice hitting you with interest and penalties. For more details, please review Penalties for Underpayment or Late Returns. Tax News Unclaimed Refunds The IRS is sitting on more than $2.2 billion in unclaimed refunds. The refunds are owed to approximately 1.8 million taxpayers who failed to file 2003 returns. The IRS estimates that half of the individuals entitled to refunds would receive more than $611. In order to claim these funds, however, 2003 tax returns must be filed by April 17, 2007. For more details, please read Over $2 Billion in Unclaimed Refunds From 2003 Faces Looming Deadline. Income Tax Preparation GainsKeeper Compatible Tax Tips Newsletter Continuing our effort to provide you with valuable tax information, we will periodically update this page with useful tips and information on issues that you commonly deal with. Sign up for our Free E-mail Newsletter E-mail Address: Prepare Now for Next Year's Tax Season Mercifully (or unmercifully), this year's April 17 tax deadline has come and gone. Unfortunately, the same cannot be said for our continuing obligations as taxpayers. With another tax filing season less than a year away and while your psychological scars are still fresh, please consider these lingering tax-related issues. If you had a more difficult tax season than usual, remember to plan now to prevent history from repeating itself next year. For now, though, you may resume your post-tax filing celebration. Tax Guide 2008 Penalties for Underpayment or Late Returns What happens if you don't file a tax return or pay taxes that you owe by their due date Generally, in this situation the IRS will send you a notice hitting you with interest and penalties. For more details, please review Penalties for Underpayment or Late Returns. Tax-Filing Tips Available Although the April 17 tax filing deadline is past, there are still many taxpayers who have not yet filed a tax return. For those who still need them, some handy tax tips are available to get you through your extended filing season. To learn more about these tips, please read Last-Minute Tax Filing Tips. Tax News Archive For more news stories and features on federal, state and payroll tax issues and how they may affect you, read the listing of articles in the archive. Income Tax Preparation GainsKeeper Compatible Tax Tips Newsletter Continuing our effort to provide you with valuable tax information, we will periodically update this page with useful tips and information on issues that you commonly deal with. Sign up for our Free E-mail Newsletter E-mail Address: Vacation Home Rentals A second home in the country, a condo in the city, or a houseboat on the lake can all be a pleasant place to spend your vacation. They can also be made to partially pay for their own costs, if you can rent them out to others for at least a few days or weeks each year. Tax News New Tax Laws Enacted After months of political wrangling, Congress has passed a small business tax incentives bill coupled with an increase in the federal minimum wage. The Small Business and Work Opportunity Tax Act of 2007 (2007 Small Business Tax Act), signed into law on May 25, 2007, is part of a much larger and more controversial bill, H.R. 2206, U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act of 2007. The 2007 Small Business Tax Act targets nearly $5 billion in tax incentives, principally to small businesses. It also includes tax incentives to help taxpayers recovering from Hurricane Katrina, as well as an important package of S corporation reforms. However, revenue raising provisions totaling nearly $5 billion mean more taxes for certain taxpayers, especially familes with children. To learn more about this recent development, please read New Tax Laws Provide More Pain than Pleasure. With the approach of the hurricane season, the IRS is encouraging taxpayers to safeguard their hard-to-replace tax records and financial documents. According to the IRS, a few simple steps can help taxpayers and businesses protect financial and tax records in case of hurricanes and other disasters. ith forecasts calling for an active Atlantic hurricane season, the IRS encourages taxpayers to protect tax and financial documents that can be hard to replace, " IRS Acting Commissioner Kevin M. Brown said. "A little planning can help safeguard valuable information in case a hurricane or other disaster strikes." Below are some of the IRS's tips for individuals and businesses on maintaining financial and tax records: Paperless Recordkeeping. An outstanding way to secure financial records is to receive bank statements and documents by e-mail. Important tax records, such as W-2 forms, tax returns, and other papers, can also be scanned into an electronic format. Taxpayers who have all financial records in electronic format can periodically copy their records onto a "key" or "jump drive" and send them to a relative in another city for safekeeping in case the taxpayer's normal computer backup systems are destroyed. Taxpayers can also copy files onto a CD or DVD. Documenting Valuables. In order to recall and prove the market value of items for insurance and casualty loss claims, taxpayers can photograph or videotape the contents of their houses, especially items of great value. The photos or videotape should be stored with a friend or family member who lives away from the geographic area at risk. IRS Publication 584, a disaster loss workbook that can help taxpayers compile a room-by-room list of belongings, is also available. Fiduciary Bonds for Payroll Services. Employers who use a payroll service provider should ask the provider if it has a fiduciary bond in place. The bond could protect the employer in case the payroll service provider defaults. Updating Emergency Plans. Taxpayers should review emergency plans annually. Individual taxpayers should save documents that everyone should keep, including W-2s, home closing statements and insurance records, among others. Employers who hire new employees and companies or organizations that change functions should update their plans and inform their employees of the changes. IRS Assistance. Immediately after a casualty, taxpayers can request a copy of a return and all attachments, including Form W-2, by using Form 4506, Request for Copy of Tax Return. Taxpayers who need information from their return can order a free transcript by calling 1-800-829-1040 or using Form 4506-T, Request for Transcript of Tax Return. Transcripts are available for the current year and returns processed in the three prior years. Tax News Online Tax Scam Alert The Internal Revenue Service recently alerted taxpayers to the latest versions of an e-mail scam intended to fool people into believing they are under investigation by the agency's Criminal Investigation division or "Fraud Department." To learn more about this problem, please read IRS Warns Taxpayers of New E-Mail Scams. New Tax Laws Enacted Archived Tax Tips Newsletter Income Tax Preparation GainsKeeper Compatible Tax Tips Newsletter Continuing our effort to provide you with valuable tax information, we will periodically update this page with useful tips and information on issues that you commonly deal with. Sign up for our Free E-mail Newsletter E-mail Address: The Basics of Tax Planning Tax planning is a process of looking at various tax options in order to determine when, whether, and how to conduct business and personal transactions so that taxes are eliminated or reduced. As an individual taxpayer, and as a business owner, you will often have the option of completing a taxable transaction by more than one method. The courts strongly back your right to choose the course of action that will result in the lowest legal tax liability. In other words, tax avoidance is entirely proper. Although tax avoidance planning is legal, tax evasion the reduction of tax through deceit, subterfuge, or concealment is not. Frequently, what sets tax evasion apart from tax avoidance is the IRS's finding that there was some fraudulent intent on the part of the taxpayer. The following are four of the areas most commonly focused on by IRS examiners as pointing to possible fraud:

• A failure to report substantial amounts of income, such as a shareholder's failure to report dividends, or a store owner's skimming from the cash register without including it in the daily business receipts.
• A claim for fictitious or improper deductions on a return, such as a sales representative's substantial overstatement of travel expenses, or a taxpayer's claim of a large deduction for charitable contributions when no verification exists.
• Accounting irregularities, such as a business's failure to keep adequate records, or a discrepancy between amounts reported on a corporation's return and amounts reported on its financial statements.
• Improper allocation of income to a related taxpayer who is in a lower tax bracket, such as where a corporation makes distributions to the controlling shareholder's children.

How a tax plan works. There are countless tax planning strategies available, particularly if you own a small business. Some are aimed at your individual tax situation, some at the business itself. But regardless of how simple or how complex a tax strategy is, it will be based on structuring the transaction to accomplish one or more of these often overlapping goals:

• reducing the amount of taxable income
• reducing your tax rate
• controlling the time when the tax must be paid
• claiming any available tax credits
• controlling the effects of the Alternative Minimum Tax
• avoiding the most common tax planning mistakes

In order to plan effectively, you'll need to estimate your personal and business income for the next few years. This is necessary because many tax planning strategies will save tax dollars at one income level, but will create a larger tax bill at other income levels. You will want to avoid having the "right" tax plan made "wrong" by erroneous income projections. Once you know what your approximate income will be, you can take the next step: estimating your tax bracket. Penalties for Underpayment or Late Returns What happens if you don't file a tax return or pay taxes that you owe by their due date Generally, in this situation the IRS will send you a notice hitting you with interest and penalties. For more details, please review Penalties for Underpayment or Late Returns. Keeping Good Records Preparing to meet your annual tax obligations is a year-round process. For example, everyone who pays taxes is required to keep accurate, permanent books and records so they can determine the various types of income, expenses, gains, losses, and other items that affect their income tax liability for the year. To help get you on the road to better tax organization, please read Keeping Good Records. For the vast majority of us that fall somewhere between the super-wealthy and the poverty level, a major factor that influences our education investment choices is the availability of tax breaks for specific education investments and expenses. As of 1998, a new group of tax benefits has become available to those who are pursuing higher education for themselves, their spouse, or their dependents. These include: In most cases you have to choose among these benefits, since the same student is not permitted to use two different education tax breaks in the same year. Nevertheless, these tax breaks can help defray the high costs of pursuing an education. Three additional types of tax breaks are worth mentioning here: employer-provided educational assistance, qualifying work-related education deductions, and a deduction for student loan interest. Under a qualified employee benefit plan, up to $5, 250 per year can be provided to an employee as reimbursement for educational expenses (includes tuition, fees, books, supplies, and tools). The tax law does not require the education to be related to the job, or part of a degree program, although some employers may impose these requirements under their particular plan. Also, covered educational expenses may include graduate level course work, even courses leading to a professional degree. If you don't receive employer-provided assistance under the type of plan described above, or if the assistance you receive is more than $5, 250 per year, there is another tax law provision under which you may receive a tax break for education. Under the work-related education rules, education of any type (whether or not it leads to a degree, and whether it is technical, vocational, undergraduate, graduate, or professional) will be deductible if certain requirements are met. Finally, there is an education tax break that allows taxpayers with moderate amounts of income to deduct interest due and paid on any qualified education loan. The maximum deductible amount of the deduction is $2, 500. However, the deduction is phased out and eventually eliminated for higher-income taxpayers. There are certainly many more related details and issues to consider. For additional information on tax breaks for education, Credit Ratings Credit Scores . Tax Guide 2008 Net Operating Losses Many small businesses have recently suffered major losses due to the hurricane Katrina. Although it may be small comfort, sole proprietors will normally be able to deduct the loss from their total income from other business ventures or from any salary, wages, or other earnings. The credit for energy efficient home improvements can be claimed for qualifying energy efficient items including insulation systems, windows, furnaces, and solar panels placed into service after December 31, 2005, and before January 1, 2008. The Energy Act provides a credit for individuals who make improvements to their homes that are energy efficient. Individuals may claim a credit of ten percent of the cost of purchasing insulation systems that reduce heat gain or loss, exterior windows (including skylights), exterior doors and metal roofs that meet Energy Star requirements. The maximum credit for all taxable years is $500. However, no more than $200 of the credit can be attributable to expenses for windows. The following items are eligible for the credit:

• $50 credit for each advanced main air circulating fan;
• $150 credit for each qualified natural gas, propane or oil furnace or hot water heater; and
• $300 credit for each item of qualified energy efficient property.

Through the end of 2008, an additional credit is available for the addition of qualified solar panels, solar water-heating equipment or a qualified fuel cell power plant. The credit for solar panels is 30 percent of the cost, but no more than $2, 000. However, no credit is allowed for systems used to heat a pool or hot tub. Now, start improving those homes before it snows (or the 2007 tax year ends)! Tax Guide 2008 Net Operating Losses monebaggasse