February 22, 2005
As tax preparation season begins, military families, people who contributed to tsunami funds, and hybrid car owners may find it worth their while to file early this year.
Tax codes typically change every year, and a number of changes have been made for 2004. For instance, President Bush recently signed legislation that allows people who contributed to the Southeast Asia tsunami relief efforts, to deduct their gifts a year earlier.
“If you donated clear through January 31st you are able to deduct it on your 2004 tax return,” said Victoria Swyers, an agent for H&R Block.
Also this year, more people can deduct IRA contributions because the government boosted the allowable income thresholds by about 12 percent.
“If you have one of those hybrid cars, you do get a tax deduction. It's not forever and ever it's just for the first couple of years you can do it,” said Swyers. Two-thousand dollars is the deduction for those that bought a "clean fuel" vehicle last year.
Also, officials said the earned income tax credit, a lucrative break for the working poor, will be available to more military families in 2004 because it will allow combat pay to be included as earned income.
These are just some of the breaks that you can get by staying ahead of the game.
"It's just best to come in early. There is always maybe a little bit of advise that's going to help and everything, and get it done and out of the way," said Swyers.
Tax advisors said most people wait until the last minute to file their taxes. The faster you mail it in, the faster you can cash that check.
Be sure to check out our Tax Tips section on the website for more information and advice on your own tax needs.