Check the new credits and taxes Before you file your tax return next spring, make sure you're up to date on the most recent tax credits.  (Fortune Magazine) -- For people hoping to save green by being green, this year "there are new credits of up to $500 lifetime for energy-efficient improvements to your home," says Mark Luscombe, a CPA with tax-information publisher CCH. Other incentives apply to eligible solar water heaters and related electrical equipment and, for many taxpayers, the purchase of hybrid or alternative-fuel vehicles. "But they all have to be in use by the end of the year," says Luscombe. "Waiting lists don't count."
You should also be aware of a big change in the "kiddie tax." Formerly children over age 14 paid taxes on investment income at their own rates. But as of this year, kids up to age 18 with investment income of more than $1,700 a year will be taxed at their parents' rates. That means parents who transferred assets to their teens last year to save on taxes are now stuck. What to do if your child has an investment portfolio? Steer clear of dividend stocks and mutual funds boasting high capital-gains distributions. " Consider switching to longer-term investments that produce little or no taxable income," says Luscombe. One good choice for young portfolios: Series EE U.S. Savings Bonds, on which the interest is tax-free until maturity (the bonds', not your kids'). Previous steps: 3. Sock it away 4. Give smarter 6. Clean up your taxable account 7. Do a property insurance checkup 8. Check the new credits and taxes _______________________________ Financial Help from UncleSam.Gov. A smart way to get a return on your taxes: Check out these websites Are You Leaving Refund Dollars on the Table? Before you sign that tax return, test your knowledge of deductions, credits and just whom you can trust at the IRS. |
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