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January 9,
2007 ( New York, NY )
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In January the mailbox fills up with credit card bills, not holiday
tidings. January is also the month that W-2’s and 1099’s, vital to tax
preparation, start arriving. But if that isn’t enough, you have to also get
up–to-speed on the important new changes in the tax law. If you don’t know
the new rules now you could spend or invest your way out of a tax break.
(article continued below ...)
New Tax Breaks
Itemized deduction for mortgage insurance. This new tax break for 2007
only allows taxpayers to deduct mortgage insurance commonly called private
mortgage interest or PMI. The deduction begins to phase out at $100,000. AMT
credit relief. A new refundable credit worth as much as 20% or $5,000. It
applies to taxpayers who have long-term, unused AMT credits, who also have
AMT income from incentive stock option (ISO’s). Health Savings Accounts (HSAs).
Funding the accounts has become easier with new rules allowing roll-overs
from flexible spending accounts (FSAs) and health reimbursement accounts (HSAs).
Also there is an option for a “once-in-a-lifetime” rollover of funds from an
IRA to an HSA.
And Stricter Rules for Cash Contributions!!
Beginning January 1, you will need a receipt for all cash donations under
$250 or you’ll receive no deduction. A cancelled check will do, as will a
written acknowledgment from the charity.
Time is running out for these tax saving opportunities
Hybrid car credit. This credit worth up to $3,400, replaced a tax
deduction for hybrid cars. This only applies to the first 60,000 hybrid cars
sold per manufacturer and will be reduced and phased-out after the quota has
been meet. Residential energy improvement credit. This is the last year to
get a tax credit of up to $500 for making your home more energy efficient.
Installing new windows, doors or insulation can save on energy now and on
your 1040 next year. Deductions Restored. Congress waited until the last
minute to renew these popular tax breaks. Educator expense deduction.
A
deduction for up to $250 for out-of-pocket expenses. College tuition
deduction. Available for 2006 and 2007, taxpayers can once again deduct up
to $4,000 of tuition and fees if you meet the income restrictions. State and
local income tax deduction. This is particularly important if you don’t live
in a state with an income tax. And there is no recordkeeping required. The
IRS has a “safe harbor” amount keyed to state, filing status and number of
dependents. For more on what can work for you, against you, and how to do
better this year, see J.K.Lasser’s Your Income Tax 2007 and the Supplement
at www.jklasser.com .
For further information, to request a review copy of J.K. Lasser’s Your
Income Tax 2007 or to schedule an interview with J.K. Lasser spokesperson,
tax attorney Donna LeValley, please contact:
Nancy Colson
Managing Director
The Alternative: Media Placement Specialists
212-246-1580/ ncolson@nyc.rr.com
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