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12-06-2006, 10:30 PM
THE NEWS TRIBUNE
Published: December 6th, 2006 01:00 AM
Year-end tax strategies can make the eyes glaze over in the fall – and make the heart go pitter-patter when you reap the benefits in the spring.
Although the year is winding down, there are still a few ways to cut your federal taxes. And if you think you know the drill, read on – some of this year’s tax-law changes offer opportunities we haven’t had before.
ENERGY CREDITS: One of them will be especially valuable at this time of year – tax credits for money spent to enhance energy efficiency. These took effect in January.
Every dollar of a credit is a dollar off your tax bill. Deductions, in contrast, are subtracted from your taxable income. So a $100 credit saves you $100, while a $100 deduction might save you only $20, assuming a 20 percent tax bracket.
The most generous energy credit is for certain energy-efficient vehicles. The credit varies by vehicle. One of the most generous, for example, is $2,100 for a new Honda Civic hybrid.
For the full list of eligible vehicles, go to www.fueleconomy.gov/ feg/.
Remember, you might pay more to get a hybrid engine than for the same vehicle with a standard motor. But if you want a hybrid, be sure to get the credit. The credits phase out as carmakers sell more of these vehicles.
full article: http://www.thenewstribune.com/business/story/6268452p-5469802c.html
Published: December 6th, 2006 01:00 AM
Year-end tax strategies can make the eyes glaze over in the fall – and make the heart go pitter-patter when you reap the benefits in the spring.
Although the year is winding down, there are still a few ways to cut your federal taxes. And if you think you know the drill, read on – some of this year’s tax-law changes offer opportunities we haven’t had before.
ENERGY CREDITS: One of them will be especially valuable at this time of year – tax credits for money spent to enhance energy efficiency. These took effect in January.
Every dollar of a credit is a dollar off your tax bill. Deductions, in contrast, are subtracted from your taxable income. So a $100 credit saves you $100, while a $100 deduction might save you only $20, assuming a 20 percent tax bracket.
The most generous energy credit is for certain energy-efficient vehicles. The credit varies by vehicle. One of the most generous, for example, is $2,100 for a new Honda Civic hybrid.
For the full list of eligible vehicles, go to www.fueleconomy.gov/ feg/.
Remember, you might pay more to get a hybrid engine than for the same vehicle with a standard motor. But if you want a hybrid, be sure to get the credit. The credits phase out as carmakers sell more of these vehicles.
full article: http://www.thenewstribune.com/business/story/6268452p-5469802c.html