Tax Deadline is April 17th
Tax Day falls on Tuesday, April 17, 2007. Yes, this date is unusual. The IRS explains, "Taxpayers will have extra time to file and pay because April 15 falls on a Sunday in 2007, and the following day, Monday, April 16, is Emancipation Day, a legal holiday in the District of Columbia." For details on the change, see Tax Deadline Extended to April 17th.Claiming Extended Tax Deductions
After the IRS printed up instructions and tax forms, Congress passed the Tax Relief and Health Care Act. That law extended several tax breaks that expired at the end of 2005.Taxpayers claiming the tuition deduction, classroom expenses deduction, or state and local sales tax deduction will need to follow these steps very carefully.
Telephone Tax Refund
The Telephone Excise Tax Refund is a one-time tax credit that you can claim on your 2006 tax return. It represents a refund of excise taxes paid on long-distance telephone service. The IRS expects to refund about $10 billion in telephone excise taxes.You can choose between the standard amounts set by the IRS or the actual amount of excise taxes you paid.
Claiming the standard amount is the easiest method, but your actual amount may be higher. You should claim whichever method will result in the largest refund of your telephone excise tax.
Hybrid Tax Credit
Individuals and businesses who buy a brand new hybrid car or truck in 2006 can take advantage of the "Alternative Motor Vehicle Credit." Qualifying hybrid vehicles purchased on or after January 1, 2006, will be eligible for a tax credit ranging from $400 to $3,400 based on fuel economy. Electric and natural gas vehicles also qualify for a credit of up to $4,000. The credit is phased out once a manufacturer sells more than 60,000 qualifying vehicles.Residential Energy Tax Credits
Homeowners who install qualifying energy-efficient property in their main home may be eligible for one of two new tax credits.The Nonbusiness Energy Property Credit provides a non-refundable tax credit of up to $500 for installing energy-efficient property on your main home. Qualifying energy-efficient property includes exterior doors, skylights, insulation, and central air conditioning. The Residential Energy Efficient Property Credit provides a non-refundable tax credit of up to $2,000 for installing solar panels or fuel cell power plants in your home.
Split Refunds using Direct Deposit
You can deposit your federal tax refund into one, two, or three bank accounts. By using IRS Form 8888, you can split your refund among two or three accounts. You can even have your refund deposited into an individual retirement account, if your financial institution allows for direct deposit.
