Tax Tips
Are you aware of these helpful current tax tips? They could save you time and money in completing your taxes.
Medical mileage may be tax deductible.
Keep track of the mileage driven to and from trips to your doctor, your pharmacist, your physical therapist, etc. Multiply the total miles by 18 cents per mile for 2006 (20 cents per mile for 2007, subject to change midyear). It can really add up.
Speaking of mileage, did you know that miles driven for charitable purposes may also be deductible? If you volunteer for a non-profit, haul materials to a recycling center, etc., all such mileage is deductible at 14 cents a mile for 2006 (14 cents per mile for 2007, subject to change midyear).
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You can pay the IRS by credit card.
If you must pay the IRS, consider paying electronically using a credit card. It's quick, easy, and convenient. You can also accumulate "frequent buyer" points in the process.
Of course, you'll incur interest charges if you don't pay off your balance promptly – and you will also be assessed a "convenience charge" by the IRS.
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You may be able to get your taxes done for free.
If you or someone you know has an annual gross income below $38,000, free tax assistance is available from Volunteers Income Tax Assistance (VITA). Trained volunteers provide this service at community and neighborhood centers, malls, libraries, etc., across the country. Most VITA sites also provide free electronic filing. To find the VITA site nearest you, call 1.800.829.1040.
Filers over 60 can get free tax help through the IRS’s Tax Counseling for the Elderly (TCE) program. AARP sponsors more than 9,000 TCE sites nationwide during tax season. To find the nearest location, call TCE at 1.800.829.1040 or AARP at 1.888.277.7669.
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You may be eligible for a refund on your phone bill.
Americans have been paying federal excise taxes on long distance telephone services since 1898. Federal courts recently eliminated this tax, and every taxpayer who has ever used long distance services is due a refund.
Instead of making taxpayers comb through old phone bills, the IRS has come up with what it calls a "simplified" way for taxpayers to get a refund via their 2006 tax return. Your refund will be calculated according to the number of exemptions claimed on your return. One exemption refunds you $30, two exemptions refund you $40, three exemptions refund you $50, and four or more exemptions refund you $60.
You can, if you wish, gather up all your telephone bills between February 28, 2003, and August 1, 2006, add up all the federal excise taxes paid, and see if you are eligible for a larger refund.
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You should round up (or down) all amounts to whole dollars.
Don't waste time trying to compute every amount on your tax return to the exact penny. The IRS prefers that all amounts be rounded off to the nearest dollar. If the amount is under 50 cents, round down. If the amount is 50 cents or greater, round up. Thus, $55.21 should be rounded down to $55.00, and $781.67 should be rounded up to $782.00.
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You can find out the status of your refund online.
If you're expecting a refund, you can find out when to expect your check at the IRS Web site. To find the status of your refund, be prepared to enter the following:
- Your Social Security or IRS Individual Taxpayer Identification Number.
- Your filing status (single, married filing jointly, married filing separately, head of household, or qualifying widow(er)).
- The exact amount of your refund.
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Simple, little mistakes can easily be prevented.
Take your time. Carefully prepare your tax return to be sure it is accurate and complete. Here are five ways to avoid common mistakes that can delay the processing of your refund or even cause you to incur tax penalties.
- Sign and date your return. If you are filing jointly, both spouses must sign
- Neatness counts. If your return is difficult to read, it will be difficult to process.
- Do the math – and then do it again. Double check all figures to ensure accuracy.
- Get it right. Check only one filing status, check the appropriate exemptions, and enter the right Social Security numbers.
- Do all the paperwork. All of your W-2s and any necessary forms and schedules should be kept together and filed with the IRS. Keep a copy of everything you file for your records.
Finally, if you owe the IRS money, send in a check with your completed return Make the check payable to the United States Treasury.
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