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I read an article about saving money on taxes in our Parade magazine this weekend. I thought it was important enough to pass on some of the things I learned from it. As you know, in May the IRS will start mailing out the one-time “economic stimulus” tax rebate. The article mentioned that all you need to do is file a 2007 tax return. If you qualify for the rebate ($300-$600 - for single filers and $600-$1200 for joint filers), the IRS will send it to you. Now here is what I thought was important - Even if you wouldn’t normally file a return, to get the rebate, you must file one this year, showing at least $3000 of qualifying income for 2007.

The article also detailed this year’s new tax breaks:

If you’ve had a portion of your mortgage debt forgiven by a lender starting in 2007, you now may not have to pay taxes on this amount.

Taxpayers who bought and paid for mortgage insurance in 2007 can take a tax deduction for it. (This deduction is not available to people with higher incomes.)

If you used your car for work, you can deduct your actual costs or 48.5 cents per mile for last year - up from 44.5 cents per mile in 2006. Though with the cost of gas it sure seems like it should be more!

With all this tax rebate money floating around, you can be sure the number of scammers out there is going to increase. The article also mentioned the IRS is warning taxpayers to be on the lookout for scam artists who pretend to be with the IRS. The IRS does not send unsolicited e-mail about tax accounts or gather taxpayer informaton on the phone. The article recommends if you are in doubt, call the IRS at 1-800-829-1040 and confirm the communication you received.

The tax rebate is supposed to be for economic stimulus. If you have significant credit card debt, you might want to use your rebate to pay it off. Check out our post at pay-off-debt-with-the-debt-free-diet

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