Tax Tips for Individuals

5 Tips For Early Preparation
Earlier is better when it comes to working on your taxes. The IRS encourages everyone to get a head start on tax preparation. Not only do you avoid the last-minute rush, early filers also get a faster refund.

Amended Returns
Oops! You've discovered an error after your tax return has been filed. What should you do? You may need to amend your return.

Ayuda en Espanol
If you need federal tax information, the IRS provides free Spanish language products and services. Pages on the IRS.gov, pre-recorded tax topics, refund information, tax publications and toll-free telephone assistance are all available in the Spanish-language.

Filing An Extension
If you can't meet the April 15 deadline to file your tax return, you can get an automatic six month extension of time to file from the IRS. The extension will give you extra time to get the paperwork in to the IRS, but it does not extend the time you have to pay any tax due. You will owe interest on any amounts not paid by the April deadline, plus a late payment penalty if you have paid less than 90 percent of your total tax by that date.

Car Donations
The IRS reminds taxpayers that the rules for taking a tax deduction for donating cars to charities have changed. The American Jobs Creation Act of 2004 has altered the rules for the contribution of used motor vehicles, boats and planes after Dec. 31, 2004.

Charitable Contributions
When preparing to file your federal tax return, don't forget your contributions to charitable organizations. Your donations can add up to a nice tax deduction if you itemize on IRS Form 1040, Schedule A.

Tax Credit For Hybrid Vehicles
The Energy Policy Act of 2005 replaced the clean-fuel burning deduction with a tax credit known as the Alternative Motor Vehicle Credit. The tax credit for hybrid vehicles applies to vehicles purchased or placed in service on or after January 1, 2006.

Refinancing Your Home
Taxpayers who refinanced their homes may be eligible to deduct some costs associated with their loans.

Credit For The Elderly Or Disabled
You may be able to take the Credit for the Elderly or the Disabled if you were age 65 or older at the end of last year, or if you are retired on permanent and total disability, according to the IRS.

Selling Your Home
If you sold your main home, you may be able to exclude up to $250,000 of gain ($500,000 for married taxpayers filing jointly) from your federal tax return.

Foreign Income
With more and more United States citizens earning money from foreign sources, the IRS reminds people that they must report all such income on their tax return, unless it is exempt under federal law. U.S. citizens are taxed on their worldwide income.

Deductible Taxes
Did you know that you may be able to deduct certain taxes on your federal income tax return? The IRS says you can if you file Form 1040 and itemize deductions on Schedule A. Deductions decrease the amount of income subject to taxation.

Gift Giving
If you gave any one person gifts valued at more than $12,000, it is necessary to report the total gift to the Internal Revenue Service. You may even have to pay tax on the gift.

Marriage Or Divorce
Newlyweds and the recently divorced should make sure that names on their tax returns match those registered with the Social Security Administration (SSA). A mismatch between a name on the tax return and a Social Security number (SSN) could unexpectedly increase a tax bill or reduce the size of any refund.

Deduction Of State And Local Taxes
If you itemize your taxes, you may choose to deduct state and local sales taxes instead of state and local income taxes. The American Jobs Creation Act of 2004 gives taxpayers this option for this year's tax returns.

Filing Deadline And Payment Options
If you're trying to beat the tax deadline, there are several options for last-minute help. If you need a form or publication, you can download copies here. If you find you need more time to finish your return, you can get a six month extension of time to file using Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. And if you have trouble paying your tax bill, the IRS has several payment options available.

Refund, Where's My Return?
Are you expecting a tax refund from the Internal Revenue Service this year? If you file a complete and accurate paper tax return, your refund should be issued in about six to eight weeks from the date IRS receives your return. If you file your return electronically, your refund should be issued in about half the time it would take if you filed a paper return even faster when you choose direct deposit.

Ten Ways To Avoid Problems At Tax Time
Looking for ways to avoid the last-minute rush for doing your taxes? The IRS offers these tips.

The Tax Advocate Service, Provided By The IRS
Have you tried everything to resolve a tax problem with the IRS but are still experiencing delays? Are you facing what you consider to be an economic burden or hardship due to IRS collection or other actions? If so, you can seek the assistance of the Taxpayer Advocate Service.

Tips And Taxes
Do you work at a hair salon, barber shop, casino, golf course, hotel or restaurant or drive a taxicab? The tip income you receive as an employee from those services is taxable income, advises the IRS.

Capital Gains and Losses
Almost everything you own and use for personal purposes, pleasure or investment is a capital asset. The IRS says when you sell a capital asset, such as stocks, the difference between the amount you sell it for and your basis, which is usually what you paid for it, is a capital gain or a capital loss. While you must report all capital gains, you may deduct only your capital losses on investment property, not personal property.

Coverdell Savings Accounts
A Coverdell Education Savings Account (ESA) is a savings account created as an incentive to help parents and students save for education expenses.

IRA Contributions
If you haven’t contributed funds to an Individual Retirement Arrangement (IRA) for last tax year, or if you’ve put in less than the maximum allowed, you still have time to do so. You can contribute to either a traditional or Roth IRA until the April 15 due date for filing your tax return for last year, not including extensions.

ROTH IRA Contributions
Confused about whether you can contribute to a Roth IRA? The IRS suggests checking these simple rules.