New Tax Laws May Provide Tax Breaks
February 22, 2006 (PRLEAP.COM) Business NewsExecutives at Maryland-based FSI Tax Corp are urging taxpayers to familiarize themselves with new tax laws before filing this year because some changes may affect how much taxpayers owe.
Many of the IRS’s tax law changes are tax breaks for hurricane victims, but several amendments will also affect taxpayers throughout the country.
“Although tax law can be complicated, Gulf Coast residents should take the time to understand their options because most of the changes were implemented to assist hurricane victims,” said FSI Tax President Sean McCabe. “These changes include education breaks for students, expanded casualty loss deductions and penalty-free access to retirement funds.”
The new tax code also provides tax breaks for people who spent their time and money helping hurricane victims. Previously taxpayers could only claim donations totaling up to half of their incomes, a limitation that affects wealthy taxpayers, but now they can claim the full amount. Volunteers can also claim a more significant charitable mileage deduction for Katrina-related relief.
One change that won’t benefit charitable tax payers involves car donations. Taxpayers must claim the amount the charity received when the car was sold, not the fair market value of the car. However, drivers purchasing hybrid cars can still enjoy the $2,000 deduction that was supposed to fall to $500. This change is good news for people planning to buy an eco-friendly car this year because the tax credit could be worth as much as $3,400.
The elderly and blind should also be aware of higher standard deduction amounts this year.
McCabe recommends taxpayers also consider how they plan to file this year. Taxpayers can choose between 19 software companies through the IRS’s Free File Alliance — many of which offer free filing to taxpayers who make $50,000 or less. Taxpayers who previously filed using TeleFile, which is no longer being offered, are automatically eligible to use the Free File program.
About FSI Tax Corp:
FSI Tax is a tax resolution company headquartered in Columbia, MD, since January 2004. It is dedicated to helping taxpayers resolve their tax debt through various programs available from the IRS and state tax agencies. FSI Tax services include tax resolution through Offer in Compromise, Installment Agreement and other available tax relief programs. For more information, please call FSI Tax Corp at 1-877-4-FSI-NOW (1-877-437-4669) or visit www.fsitax.com.