| With the end of 2006 so near, is there anything | | | | comply with the new law that is effective for |
| you can do to help keep some of your hard | | | | contributions after August 17, 2006.Several tax |
| earned money instead of paying it out in taxes in | | | | breaks due to expire at the end of 2005 were |
| 2007? Most taxpayers are concerned with | | | | not extended for 2006 even though they were |
| shopping for the holidays not looking to what | | | | part of legislation before Congress. They include |
| awaits them right after the start of the new | | | | sales tax deduction for states that do not have |
| year. There is still time for calendar year | | | | state income taxes, the deduction for school |
| taxpayers to look at their tax situation for 2006 | | | | teachers, college tuition and fees, and a research |
| and make some strategic plans that will minimize | | | | and development credit for businesses. There is a |
| their tax burden for 2006. Knowledge of new tax | | | | slight chance that these tax breaks could be |
| laws can help you with that task. What are some | | | | extended after the November elections. If they |
| of the new tax provisions that can help you or | | | | do, IRS, software developers and taxpayers will |
| cause you grief if you fail to plan for them now? | | | | be at a disadvantage when it comes time to file |
| The following are just a few of the items that | | | | tax returns because these items have been left |
| are new.Charitable contributions are usually high | | | | off the design of the 2006 tax forms which are |
| during the Thanksgiving and Christmas holidays. If | | | | being printed this month and next month for |
| you plan to donate and deduct your contribution | | | | 2006.The telephone excise tax on long distance |
| for 2006, you should be aware of the new law | | | | service will be available for refund in 2007 for bills |
| for contributions enacted this summer by | | | | after February 28, 2003 and before August 1, |
| Congress in the Pension Protection Act of 2006. | | | | 2006. There is no need to dig out old phone |
| One of the provisions of this act is better record | | | | records in order to take this refund because the |
| keeping requirements for all contributions. All | | | | IRS has come up with a simplified method of |
| deductible contributions must be provable either | | | | claiming the refund. The simplified method will be a |
| by receipt, bank records, checks or a letter from | | | | standard amount based on the total number of |
| the charity so long as it gives the donee's name, | | | | exemptions claimed on the 2006 tax return. It will |
| the date of the contribution and the amount of | | | | amount to $30 for a one exemption, $40 for two |
| the contribution.Cash contributions are not | | | | exemptions, $50 for three exemptions, and $60 |
| deductible unless there is some type of written | | | | for four or more exemptions. However, if you |
| receipt. No proof equals no deduction. Donations | | | | have those old records, you can analyze those |
| of used household goods and clothing are also not | | | | bills for the tax paid on long distance service and |
| deductible unless they are in good used condition | | | | deduct the actual amount if it is more than the |
| or better. Household goods donated may be | | | | standard deduction computed by IRS.Look over |
| disallowed even if they meet the good used | | | | your financial records. Get with your CPA and see |
| condition requirement if the amount of | | | | what other tax provisions might help you make |
| contribution is minimal. Larger donations may | | | | your holidays bright and your tax bill to Uncle Sam |
| require a certified appraisal. If you are a donee, | | | | a lot lighter. |
| contact your CPA to find out how you can | | | | |