It's that time again to look for year-end moves to trim your upcoming tax bill.
Of course, there are the evergreens:
-Sock away money in tax-friendly 401(k)s or individual retirement accounts.
-Sell off loser stocks to offset capital gains on winners.
-Bundle medical expenses so they're large enough to deduct.
-Use up cash remaining in a flexible spending account.
But a few new breaks are worth looking at this year, and some recent tax revisions might change your investment strategy. And one new refund option is aimed to encourage savings.
PHONE TAX REFUND. A one-time refund will be given to those who paid a tax dating back to 1898 on phone bills after Feb. 28, 2003, and before August of this year.
You can figure your refund based on how much you actually paid, if you have old phone bills, or you can opt for the standard refund. That amounts to $30 for an individual, $40 for two-person household, $50 for three and $60 for families of four or more.
ENERGY CREDITS. This is the first year for credits designed to encourage people to make their home more energy efficient. A credit reduces your bottom-line tax bill dollar-for-dollar. That makes it better than a deduction.
You can get a maximum credit of $500 over two years for adopting certain energy-saving measures. The credit will cover part of the cost of adding insulation or installing exterior windows and doors. (No more than $200 can be claimed for windows.)
Also, the credit can be applied within limits to furnaces, heat pumps, hot water boilers and advanced main air-circulating fans.
But don't procrastinate. Energy credits are only good for this year and next.
HYBRID CREDITS. Buyers of fuel-efficient hybrid cars and trucks are entitled to a credit worth a few hundred dollars to more than $3,000, depending on the vehicle.
If you've been considering a hybrid, buy now rather than next year. That's because the credit applies only to the first 60,000 hybrids sold by each manufacturer and then starts phasing out.
This is already happening with some popular models. For example, consumers who bought a Toyota Prius before the end of September will receive a $3,150 credit. But Toyota hit its 60,000 limit, so the credit as of October has been cut to $1,575. The Prius credit will drop again in April and disappear in October.
DONATIONS. The bar was raised in August for those donating clothing or household items to charity. Items now must be in "good used condition or better" to qualify for a tax deduction.
Be aware, beginning in January you will need a receipt or canceled check for all cash donations, no matter how small.
Also, for the first time, filers will be able to fill out Form 8888 to instruct the IRS to split their refund and directly deposit the money in up to three accounts, such as checking, savings and an IRA.
Can't wait to start your taxes?
Let visions of sugar plums dance through everyone else's heads - what you really want to do this time of year is get a jump start on your income tax return, right? We thought so. You can already start downloading the forms you'll need, read about the latest changes in tax law and get government advice on the Web at www.irs.gov. Click on the "Individuals" link near the top of the page, then click the "1040 Central" link to get your fix.