1040 Tax Information
Note: This is not an IRS site, but a collection of ways
to save money at tax time - ways that you may not have heard
of.
IRA Tax Deduction Secret
Starting an IRA (Individual retirement
account)? There is a way to get two tax deductions from
your contribution. Instead of using cash, sell any stock you
own which has decreased in value, and then put THAT cash in your
IRA. Why? Because you can write off the capital loss for the
sale of the stock, and thereby reduce your taxes even more than
if you just put savings into the IRA.
What if you still like the stock? Buy it
back using your IRA. There is a "wash rule" in the
tax code that says you can't sell and repurchase a stock (within
a certain amount of time) just to claim a loss. However, you
and your IRA are separate entities as far as this rule is concerned,
so you can immediately repurchase the stock in your IRA and still
write off the loss.
The Telephone Excise Tax Refund (TETR)
This is a one-time payment available on
your 2006 federal income tax return. It is designed to refund
previously collected long distance telephone taxes. Individuals,
businesses and tax-exempt organizations are eligible to request
it.
Taxpayers have a choice: a standard refund
amount between $30 and $60, based on the total number of exemptions
claimed on their 2006 tax return, to eliminate the need to locate
old phone bills; or they can locate those bills and use the actual
amount. Ask your tax preparer about this one.
File Your Taxes Electronically For Free
Free File
is a relatively new IRS program is a free service offered by
companies for taxpayers with an Adjusted Gross Income (AGI) of
$52,000 or less. You can find the links to these companies at
the IRS web site.
Before selecting a company link, review
the tax software company’s criteria to confirm that you
meet their eligibility for preparing and e-filing your federal
return for free.
Fees for state tax returns may apply. Some
companies offer free state tax return preparation and e-filing.
Some companies offer free e-filing of the Form 1040EZ-T, Telephone
Excise Tax Refund, for those who want to claim the refund credit
and are not required to file a federal income tax return.
You are under no obligation to buy any
of the company’s other products or services.
General Tax Savings Tips
1. Take every deduction you can. Audits
are rare, and if you honestly think you are entitled to a deduction,
taking it is not a crime. If you are
not entitled, at most you'll have to pay a penalty and interest
- but only if you are audited.
2. Put off income or capital gains. We
once delayed a closing on a property we sold by a week, in order
to close after the new year. Our profit wasn't taxed for an extra
year that way.
3. Accelerate your deductible expenses.
If you pay the property taxes on that rental unit this year,
you get to claim it as an expense this year, and so pay less
tax.
4. Get good advice. If you have a high
income, or a business, stock market or real estate investments,
you need to talk to a good tax accountant (not just a tax preparer).
Unusual Ways To Make Money | 1040 Tax
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