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Last newsletter, we provided three tips on how to lower your 2006 tax bill. For good measure, here are three more
tips that can "ease your pain" Field of Dreams-style.
1) Donate unwanted clothing and household items to charity. After August 17, 2006, however, you can't deduct the
value of these items unless they are in "good condition or better." (In other words, save the leisure
suit and leg warmers for the next costume party.) The new law does not apply if the amount claimed is more than
$500 and you have a qualified appraisal with the tax return.
2) Consider recent changes to the "kiddie tax." Unearned income above $1,700 (i.e. dividends, interest,
etc.) is now taxed at the parent's rate through the age of 18. As a result, it may make sense to switch to investments
that yield little or no taxable income, such as US savings bonds or index funds.
3) Purchase energy-efficient appliances or an alternative-fuel vehicle. You may even be able to get a pass to ride
solo in the carpool lane!
Be sure to call your CPA if you have specific questions regarding ways you can lower your 2006 tax bill or if you
want advice for what to wear to your next costume party.
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or unsubscribe, simply reply to this message. And if you know of anyone who may be interested in "Taxing Details,"
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