Personal tax tips for tax preparation & income tax planning

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This page last updated on
January 8, 2006

Personal Tax Preparation & Income Tax Planning Tips from Brookwood Tax Service -- Winter 2006 Archive Articles (NOTE: The tax information in the following articles was current as of the date on the page. Tax law may have changed since these articles were posted.)

2006 Credits for Energy-Saving Home Improvements
Personal Tax Tip: Claim up to $500 in Credits

A new law allows homeowners to claim a lifetime tax credit of up to $500 for qualifying energy-conserving home improvements, effective during 2006.
See the Full Article for details.

Congress Provides Tax Breaks for Disaster Losses

Additional Breaks Allowed for Hurricane Katrina

Taxpayers who suffered unreimbursed property damage during one of the 2005 hurricanes may be able to deduct part of their loss on their 2005 or even 2004 tax returns. Congress also passed additional tax breaks that apply specifically to losses from Hurricane Katrina.

Full Article

Flexible Spending Arrangement Rules Have Eased

Tax Tip - You Have More Time to Spend the Money

Employees who set aside pre-tax money in flexible spending arrangement accounts (FSA's) offered by their employers used to lose any unspent funds after December 31st each year. Now, the IRS allows several more weeks to use those unspent dollars.

Full Article

Tax Tip for Social Security Recipients Who Work
Earned Income can Reduce Your Benefits

Taxpayers who are under full retirement age and still work can face reduction of their Social Security benefits, based on the amount of their earned income.

Full Article

Do You Pay Expenses for Child or Dependent Care?
Tax Tip on Claiming the Dependent Care Credit

Subject to certain income limits, taxpayers who pay for the care of a dependent so they can work are entitled to claim a tax credit based on the care expenses.

Full Article

The Alternative Minimum Tax Trap
Tax Tips on Avoiding the Trap or Minimizing the Bite
Millions of taxpayers are now being snared by the Alternative Minimum Tax (AMT) each year, and the numbers are expected to soar in the future. You should be alert for financial situations that can increase your risk of falling under the AMT, and be prepared to take actions that can reduce the AMT's bite if you will be subject to the tax.

Full Article

Are You Paying Expenses for Higher Education?

The Tuition and Fees Deduction Can Save on Taxes

If you pay higher education expenses for yourself or a dependent, one education tax break option is the tuition and fees deduction, which can reduce your taxable income by up to $4,000.

Full Article

Need Money for College Expenses?
Tax Tip - The IRS Offers a Break if You Tap Your IRA

Taxpayers who use funds from their IRA to pay qualified expenses for higher education can avoid the 10% penalty normally levied for early withdrawal (if they are under age 59 and a half).

Full Article

Tax Benefits for Members of the Military

The IRS advises that military enlistees and reservists called to active duty who have outstanding tax balances due may be able to defer payment until the completion of their active duty. The Military Family Tax Relief Act of 2003 has various other benefits related to military service. Several earlier tax law provisions gave breaks to those serving in combat areas.
Tax Information for Members of the U.S. Armed Forces has links to these details and more.


	Use Prior Year Stock Losses Are you carrying over stock losses from prior years? Those losses can be carried forward from year to year and will offset capital gains on assets you sold at a profit during 2005.


	Cost Basis is Key in Mutual Funds If you sold mutual funds during 2005, be careful in calculating your cost basis in the shares sold. Remember that your basis includes not only the cost of your initial purchase, but also the value of all reinvested dividends and capital gains during the time you held the fund. As your broker or fund company for a "gain-loss summary."


	Remember to Take the RMD from Your IRA If you have reached age 70½ this year, don’t forget to take your minimum required distribution from your IRA. Failure to do so results in a 50 percent penalty on the amount you do not take.


	Adoption Credit for Special Needs Child You are entitled to a tax credit of up to $10,390 if you adopt a special needs child. The credit is available in the year that the adoption is finalized, even if you do not have any qualified adoption expenses during that year.


	Georgia Part-Year Taxpayers There are three ways to calculate your Georgia deductions and two ways to calculate state personal exemptions. Tax-saving tip -- make sure your tax preparer knows the options and uses the best one for your tax return!

personal tax tips

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