IRS Help for the 2006 Taxpayer. Your IRS Tax Return Checklist

Preparing your IRS tax returns can be an expensive and troubling project without some sort of guide lines to follow, or an expert tax consulting service to help guide you through the annual, meticulous, process of preparing for your IRS tax return filings. As if this ever changing world was not difficult and confusing enough, Washington in the form of The Congress has reinstated, changed and added several important tax laws that should not go unnoticed or unmentioned for taxpayers of every walk in life. One of these popular reinstated tax breaks is directed towards the middle class, including a deduction of up to $4,000 for higher education tuition and fees. The provision, which expired at the end of 2005, was designed to help taxpayers whose incomes put them beyond the reach of the moderate and lower income families.

Lawmakers reinstated a deduction for state and local sales taxes that primarily benefits people living in states without an income tax. Also restored was a deduction of up to $250 for teachers’ expenses. Congress also took something away from family pocketbooks last year, raising the age at which teens are subject to the new “kiddie” tax a phrase coined by politicizations, which is the tax on the child’s investment income that must be figured at the parent’s top rate, instead of the child’s generally lower rate. Before, only those under 14 years old were subject to the higher tax, now those under 18 years of age are included. That change may consume earnings on certain college funds or saving programs started before the taxpayer friendly #529 college plans became widely available.

There’s a bit of bad news for charity chasers and pack rats. This means taking a tax deduction for donating the depleting and deteriorating junk in your attic or basement and then giving it to charity. This will be harder to prove now under the changed laws. Household goods and clothing donated after Aug. 17, 2006, must be in “very good used condition” at the least to qualify. The deduction is available to taxpayers who itemize their tax returns and must have adequate documentation and reliable receipts.

What You Will Need:

Use a checklist as a simple reminder during this busy time of the year. Gather the most common records you will need in preparing for your 2006 tax return, whether you use a popular tax software, a professional tax preparer, or a paper tax return done through traditional mail.