Date: 2006-08-21

Jackson Hewitt® encourages Americans to perform a mid-year tax review

Preparing Now May Help Save Time and Lead to a Bigger Refund This Coming Tax Season

Here are some helpful insights each taxpayer should consider now:
• Consider making the most of the new Energy Tax Act for home energy and energy-efficient car savings when working on a home improvement or purchasing a new vehicle. "Now is a good time to replace your hot water heater, central air or heat pump, as well as change windows or add new insulation," explains Mark Steber, Vice President, Tax Resources for Jackson Hewitt Tax Service Inc. "Energy-saving home renovations can lower utility bills and may qualify for a tax credit or lower a possible taxable gain when the home is sold. Certain hybrid and alternative fuel cars also qualify for an energy credit. A trained tax preparer can provide information on qualifying products before a purchase is made." Also, check with your employer; some are even providing "rebates" or cash incentives to their employees in select areas to offset the purchase price of certain energy-efficient vehicles. Remember, any cash incentive your employer pays you to purchase a qualified hybrid vehicle is taxable income to you.
• Charitable donations are not only a great way to give back, but to also save money. To help increase your annual charitable deductions, don't wait until the end of the year; take inventory now. Start by combing through closets, drawers and bookshelves, as well as cleaning out the garage or attic when looking for gently used items that others may benefit from. Donating your unwanted and unused items to charity is one of the easiest ways to obtain a tax deduction. But remember to keep a record of all items being donated in order to assess values for the items reported on your tax return. Assessing a fair and accurate value for donated items can be a daunting experience. The tax preparers at Jackson Hewitt can help assign accurate values to each of your items so that you can be confident that your deductions are in compliance with IRS guidelines.
• Take advantage of tax-free saving opportunities. "If you have a 401(k) at work, try to increase the amount you are contributing," notes Steber. "Not only does a 401(k) help with retirement expenses down the road, it also reduces your taxable income, providing a great short-term benefit."
• Consider taking care of any qualifying elective medical or dental procedures before the end of 2006 to increase the medical expense deduction on a tax return. Taxpayers who itemize on their tax return may be able to deduct such expenses, thereby increasing their total deductions and reducing the amount of taxes owed.
• Check the withholding amount on paychecks, especially if you have had an increase in income, and make sure you have enough withheld to cover your taxes next year. Adjusting your withholdings or estimated tax payments now can mean the difference between owing money and getting money back.
• Get organized! Create a folder or even the old-fashioned "shoe box" to store receipts throughout the year. Receipts for home improvement services and items, medical expenses and items donated to charity can be misplaced or forgotten. Making sure that these and other important documents are located in one easy-to-find place can greatly simplify your efforts during the tax filing season and help you obtain all the credits and deductions you are entitled to.

Throughout the year, the Jackson Hewitt website (www.jacksonhewitt.com) provides updates and resources to help taxpayers prepare for next season's filing, including:

• Tax resources and information about new tax laws
• A list of items to obtain and organize prior to having your tax return accurately prepared
• Information on the "Top Overlooked Deductions" and "Top Overlooked Credits"
• Deductions@Work -- a proprietary feature that lists job-related credits and deductions for nearly 30 professions
• The "What to Bring to Your Tax Preparer" Checklist

About Jackson Hewitt Tax Service Inc.

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