Energy tax breaks
Making energy-efficient improvements to your home,
such as new exterior windows, water heaters or furnaces,
may garner a tax credit of up to $500 in 2007.
Additionally, a credit may be available for the purchase
of hybrid or alternative fuel vehicle. Check with the
IRS at www.irs.gov for a list of qualifying vehicles.
New rules for charitable contributions
Beginning this year, a donor must be able to show
proof of a donation to take a deduction for any
monetary charitable gift. A cancelled check, credit card
statement or receipt from the charity will satisfy the
documentation requirement.
A law passed in 2006 allows a deduction for the donation
of clothes or household items only if they are in “good”
used condition. However, the law did not define the term
“good.” Be sure to get a receipt from the charity and
take pictures of the items to substantiate the
deduction. An exception to this rule exists for a single
donated item appraised at more than $500, as long as a
qualified appraisal is included with the donor’s tax
return.
Those age 70.5 or older can transfer up to $100,000
directly from an IRA to charity. No deduction can be
taken on the gift, but there is no income tax due on the
distribution. This provision is scheduled to expire at
the end of 2007.
» Next:
Common deductions
This article was provided by the American Institute of Certified Public Accountants (AICPA).
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