For instance, on top of the personal exemptions and standard deductions, there's a residential property energy credit for installing qualified energy-saving items in your primary residence. There's also a credit available for installing special solar or fuel-cell equipment.
If you have a dependent under age 17, you might qualify for a Child Tax Credit of up to $1,000 depending on your income. Plus, if you have dependents under age 13 or other dependents like a parent or spouse who can't take care of themselves, you can take advantage of the Child and Dependent Care Credit for certain qualified expenses such as day care, housekeeping and baby-sitting.
And don't forget the use of your car. There are different standard mileage rates for business use, charitable use, and medical and moving travel. You're driving the miles and buying the gas anyway, so why not get the deductions if you qualify?
FILE EARLY
If you're due a refund, you'll want to file early. But you won't know for sure until you run the numbers, so it pays to get started now. Along with the tax return package and instructions you receive from the IRS in the mail, you might want to check out IRS Publication 17: Your Federal Income Tax before you begin.
If you're an investor, you'll find Publication 550: Investment Income and Expenses full of information on everything from how to report interest, dividends and capital gains to which investment-related expenses are deductible for income tax purposes. These and several other pertinent publications are available online at www.irs.gov. Even if you don't prepare your own taxes, this is valuable knowledge.
Once you know your tax status, you can use e-filing and direct deposit to receive a refund quickly. If it turns out you owe a little, you can always hold off paying until April 15.
GET A JUMP ON '08.
As you're preparing your '07 return, you might want to begin thinking about '08. There are certain tax changes that could affect your financial decisions this year. For instance, the personal exemptions and standard deductions have gone up for 2008, as have IRA contribution limits. At the same time, the wage base limit for Social Security withholding has also increased. You can receive the latest facts and figures at www.irs.gov. Or talk to your tax adviser.
Getting a jump-start on your '08 tax planning can help you decide if you need to change your withholding, when to make your IRA contributions, and how tax-smart investing can help you keep more of your money. Thinking about these items now will make tax time next year even easier.
Personally, I love spring. But I enjoy it even more if I don't have to think about taxes.
Therefore, I try to take my own advice and get the tax preparation done while it's still a bit rainy and gloomy outside. If you do too, come April 15 you won't be running to the post office; you'll be sitting back and smelling the flowers.