2007 -
Sales Tax Deduction for Itemizers
Instead of claiming state income tax on Schedule A, those of us who live in a state without a significant income tax may benefit from saving receipts to prove actual sales tax paid. A table is used to compute a basic amount based on your income, but in addition to this amount, you may add sales tax paid for home improvements, purchase of boats or motor homes.
Retirment Savers Credit - Contribute to an IRA or 401(k)Some individuals actually get a tax credit of up to 50% of the amount they contribute to their IRA/401(k)(maximum credit is $1000)
ROTH IRA
If you participate in your employer's pension/profit sharing plan, you may not be entitled to take a full deduction to your IRA. Solution: Open a Roth IRA. Those whose incomes exceed $100,000 may not be allowed a full contribution. There is no deduction for a Roth contribution, but if you leave the funds in the account for at least 5 years and/or wait til age 59 1/2 to make withdrawals, you pay NO tax on the earnings.
Standard Mileage for Business use of Vehicle
Use the standard mileage rate for the first year a vehicle is used in business. A taxpayer may not use the standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS), after claiming a Section 179 deduction for that vehicle, or for any vehicle used for hire.
IRS Std Mileage Tables
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