Share on ThriftyFunThis guide contains the following solutions. Have something to add? Please share your solution!
New heating equipment which is energy efficient earns a $150 tax credit.
Structural improvements which create a higher level of efficiency also earn a 10% credit. Added insulation, energy efficient windows and doors, as well as metal roofs can qualify for this credit.
There are several ways to improve the energy use of the home as well as earn this tax credit. Caulk windows and doors and note the cost of such work. Replace the heating system for a more fuel efficient, newer system and/or replace the thermostat for programmable energy efficient one. Replace products such as water heaters and central air conditioners.
Qualifying improvements must have been made between December 31, 2005 and December 31, 2007. If a tax credit was granted for the tax year 2006, another credit can be awarded in 2007. However, the total amount of credit for both years is a maximum of $500.
Of the maximum credit amount, only $200 can be applied to the cost of new windows. When replacing a water heater, a maximum credit of $300 can be claimed. Likewise, a new heating system claims a maximum of $150.
All improvements must have a lifespan of at least five years. Temporary efficiency improvements do not qualify.
For more information about the Energy Policy Act of 2005 look at http://www.energystar.gov/index.cfm?c=products.pr_tax_credits
This site provides excellent, easy to understand specifications for these tax credits.
No matter what tax credit, the energy savings are worth the investment in most cases. While you may earn an extra $500 on your tax return next year, you can also save 10% or more on your energy bills.
Tax time is coming. Did you know that if you need help, you can call 1-800-829-1040 for free. This is from AARP.
By Jodi from Texas
Avoid tax refunds. Getting one usually indicates poor tax planning. It means that you have overpaid your taxes throughout the year. What's worse, you're not even collecting interest on the funds you're "lending" to the IRS. Adjust your withholding at work so that less is taken out each payday.
Did you get a big refund or owe a big tax bill April 15th of this year? If so, now is the time to adjust the amount of taxes withheld from your paycheck. Ideally, you want to get your tax bill or refund as close to zero as possible. Having the wrong amount withheld from your paycheck can lead to costly personal-finance mistakes. Calculate the proper withholdings to avoid a large refund or payment to the IRS.
To figure out how many allowances to claim, use the IRS withholding calculator.
Source: Hard to believe it but the Internal Revenue Service (IRS)
By Diana from Prospect, KY
For all of us here in the U.S. today is the last day to file your income tax return. If you have already filed, great, but if you haven't yet filled out your forms, it might be best to file for an extension. . .
Keep all receipts for medical expenses, charity donations, real estate taxes, etc. and file with your tax forms even if you don't itemize that year. You have 3 years to file an amended tax return and it will be much harder to locate the information years later. By Cheryl from Missouri
If you think you may be getting a tax refund this year, start working on your taxes now. Use your year-end paycheck stubs for income and taxes withheld; start adding up medical bills; start adding up charitable contributions.
Ask a QuestionHere are the questions asked by community members. Read on to see the answers provided by the ThriftyFun community or ask a new question.
It's getting close to tax time again. A few readers suggested we do a Brainstorm looking for tax tips so here it is. Does anyone have any advice or tips to help people during the tax season?
Check tax stategies at Quicken.com
This will not help for this year, but get ready now for filing 2001. Label a folder "Taxes 2001" and file everything as it enters your home that relates to taxes- for example property tax reciepts, medical receipts, donation reciepts (Goodwill, etc.).
I love to file our taxes online using the cheapest version at H & R Block. Even though it costs me $29.95, is has shown me how to get more than $700 more each year than I figured on paper! Also, don't automaticlly file your state return with your online provider -- some states let you file through their website for free! We live in KS and you can here!
If you now how to file your taxes use a company called http://www.taxslayer.com. They are only 9.95 for any tax bracket. They also offer refund loans that can be deposited to your checking account. Don't know the prices on that one because I can afford the $10 to file. The price is for federal and state elcetronic filing. Irs.gov shows you places where you can do your federal for free if you make under 30,000 a year and many states let you file online through their web site for free no matter what tax bracket you are in.
I work every year with Volunteer Income Tax Assistance, sponsored by the IRS. It is a free tax preparation and filing program for low income and senior citizen taxpayers. There are many VITA centers throughout the US, but I'm surprised by how many people don't know about this program. I work on an Air Force base, which has a VITA center as do most military reservations.
For those of you that don't fall into the low income, senior, or military catagories, every year, starting in January, the IRS web site, www.irs.gov, will have a list of commercial tax preparation companies that will allow any taxpayer to efile, or paper file your taxes FOR FREE! Just make sure you go to www.irs.gov NOT www.irs.com.
Here's a couple tax strategies: Make sure you keep track of all of your charitable donations, including the clothing and household goods you donate. You are allowed to deduct the fair market value of all items you donate, if you itemize. Always get a receipt for the items you donate and make sure the receipt has the correct date on it.
If you play the lottery or gamble and have to claim your winnings, you can also claim your losses, up to the amount of money you've won. Keep all of your losing lottery tickets that you purchase for the year.
My tip: Try more than one tax program before you file your taxes. You can start a free account on every website for free. I tried that this year and found a website that doubled my refund and only charged me $10 (with a free federal).
The site is http://www.freetaxusa.com
Can you still claim a child who 17 as a dependent?
See this information for requirements of the child tax credit: turbotax.intuit.com/
This depends entirely on your circumstances. You need to contact your tax office. Here in Canada, there is a toll free number that you can phone that will put you in contact with someone who can answer your problem. Here we can claim them if they living at home, until they are 18. If they are full time students, they can be claimed until they are older. I am sure it differs in other countries.