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Last Minute Tax Tips from PICPA

PHILADELPHIA – Taxpayers who waited to the last minute to file their 2006 tax returns need to take some extra steps to avoid costly mistakes or overlooking important tax savings in their haste to make the April 17 filing deadline. Pennsylvania Institute of CPAs offers the following advice to all the procrastinators out there.

Don’t lose the chance to collect on the one-time phone excise tax refund.  Whether you choose the standard amount or have the time to calculate your actual credit, this is the only year that the credit will be offered. 

Be sure to determine whether you qualify for other new or common credits or deductions:

• State and local taxes: if you owed money on last year’s state or local earned income tax return, Philadelphia school income tax return, or if you paid tax to another state, you can deduct that amount on your 2006 federal tax return.
• Educator expenses: Tax forms do not include this deduction specifically, so it is often being overlooked. 
• Education expenses: You may qualify for a credit or a deduction on tuition and related expenses paid for yourself, spouse, or dependent.
• Student loans: This year, a taxpayer may deduct student loan interest even if a parent pays the loan. However, this deduction may phase out based on your total income level.
• Charitable contributions: Don’t forget about new rules concerning documentation of cash and non-cash donations.

The reach of the Alternative Minimum Tax (AMT) has grown in recent years.  Be sure to calculate the AMT to make certain you do not fall into that status.

Check your math, and check it again. Make sure all Social Security numbers are included and correct. 

Consider e-filing and direct deposit. These are the best ways to get your refund quickly.  If you are filing a paper return, be sure to sign it.

If you owe money, don’t be tempted to accumulate debt by paying the amount due with a credit card. Not only will you be subject to interest on the balance, there are additional fees involved with this option.

If you just cannot make the filing deadline, taxpayers can request an automatic extension with the IRS. Though if you owe, that estimated amount is still due by the April 17 deadline, or you will be subject to fines and penalties.

Founded in 1897, the Pennsylvania Institute of Certified Public Accountants is a professional association of more than 19,000 CPAs who work in public accounting, industry, government, and education. PICPA is the second-oldest state CPA organization in the United States. To find a member CPA in your area, visit our Web site at www.picpa.org and click on CPA Locator. Students and educators can visit PICPA's specially designed site www.CPAzone.org to get the latest information about careers in accounting and the CPA profession.