Credits help save some money



Some taxpayers can get a tax break for making their homes energy-efficient.
YOUNGSTOWN -- As the income tax season shifts into full swing, tax preparers should know the ins and outs to receive the maximum refund.
Although there aren't many new credits offered on the 2006 federal income tax forms, there are a few that could save taxpayers a significant amount of money, say income tax preparers and businesses.
"Primarily, the best things for the average taxpayer are the new energy credit and the telephone excise credit," said Bill Ackerman, CPA of Ackerman Tax Service, located on Church Hill-Hubbard Road in Liberty.
The energy credit is for people who replace windows and doors with ones that are energy-efficient. Skylights and insulation also fall into this category, Ackerman said.
"To qualify, it has to be in a principal residence," he said. "You get a percentage of what you spent, but there is a limit."
Limits vary depending on the installation. For instance, there is a 200 limit for storm windows and doors, he said.
Telephone excise tax
The telephone excise tax credit is a refund on taxes for long-distance phone calls.
"Even if you aren't qualified, you can still file for it," said Carol Gingery, office manager of Jackson Hewitt Tax Service, located on Boardman-Canfield Road in Boardman. "It's not a large amount of money, but it's something."
Gingery said there is another new tax law a lot of people aren't aware of. It is for taking deductions for contributions to charity. Taxpayers need proof of what they deduct. It is in effect now and will get stricter.
She said it's important for taxpayers to have proof of everything they claim as a deduction.
"When people donate clothing, they don't want to go over 500 because there is a special form to fill out if the donation exceeds that amount," Gingery said. "People think if they fill it out, they'll get audited. It's foolish not to fill out the form because people cheat themselves."
Biggest error
The biggest error taxpayers make when filling out their forms is missing deductions, tax preparers said.
People miss a lot of good deductions because they don't know what they can legally deduct, Ackerman said.
People also seem to overlook deductions they're entitled to, such as home mortgages, property taxes and medical expenses, said Bill McNeff, district manager of H & amp;R Block in Youngstown.
"Because they overlook expenses, they end up overpaying," McNeff said.
Gingery said another big mistake taxpayers tend to make is claiming something they shouldn't. Taxpayers claim children they shouldn't, and people think they qualify for certain tax breaks but they really don't, and this could cost them.
Because preparing to file tax forms can be time-consuming, many taxpayers are starting to file electronically because it speeds up the refund process.
"Filing electronically is by far the method of choice," McNeff said.
He added that the refund check comes back quicker this way. If a person files electronically, they'll get the check in 14 and 21 days, but if they do it by paper, it takes up to six weeks.
Even though electronic filing, or e-filing, makes the process go faster, taxpayers don't have to pay any sooner if they owe the government money, Ackerman said.

More like this from vindy.com

Subscribe Today

Sign up for our email newsletter to receive daily news.

Want more? Click here to subscribe to either the Print or Digital Editions.