FAQ section of our website is provided by Internal
Revenue Service. For all details regarding 2006 refund, you
can visit www.irs.gov
** What is E-File?
E-File is a Web-based tax preparation application. E-File
has now been given a friendly, interview-based interface so
that anyone can have access to the detailed tax preparation
system that calculates tax returns.
** e-file Benefits
• Accuracy! Your chance of getting an error notice from
the IRS is significantly reduced.
• Security! Your privacy and security are assured.
• Electronic Signatures! Create your own Personal Identification
Number (PIN) and file a completely paperless return through
your tax preparation software or tax professional. There is
nothing to mail!
• Proof of Acceptance! You receive an electronic acknowledgment
within 48 hours that the IRS has accepted your return for
processing.
• Fast Refunds! You get your refund in half the time,
even faster and safer with Direct Deposit - in as few as 2
days.
• Electronic Payment Options! Convenient, safe, and
secure electronic payment options are available. e-file and
pay in a single step.
• Federal/State e-file! Prepare and file your Federal
and state returns (where applicable) together and double the
benefits you get from e-file.
** 2006
Tax Law Changes (provided by Internal Revenue
Service)
There were several important changes to tax
law for 2006 that came about due to a number of reasons:
• Sweeping changes made in 2002
• Dramatically rising energy costs in 2005
• Hurricane Katrina
** Alternative Minimum Tax (provided by Internal
Revenue Service)
For tax year 2006, the exemption amount for alternative minimum
tax (AMT) has been increased as follows:
• Single -- $42,500
• Married filing jointly or surviving spouse -- $62,550
• Head of household -- $42,500
• Married filing separately -- $31,275
** Standard Deduction Increased
(provided by Internal Revenue Service)
The basic standard deduction is now:
You can phase out traditional IRA's if your AGI is above a
certain threshold. Your tax preparer will have details pertinent
to you personal financial information.
• $7,300 for the head of household
• $10,000 for all married taxpayers who file jointly
as well as qualifying widows or widowers
• $5,000 for married taxpayers who file separately
• $5,000 for single people
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** Restrictions on Charitable
Contributions (provided by Internal Revenue
Service)
Cash contributions.
All cash contributions made in tax years beginning after August
17, 2006, to any qualified charity must be supported by a
dated bank record or a dated receipt. The tax year for most
individual taxpayers begins on January 1.
Clothing and household items.
Beginning with contributions made after August 17, 2006, no
deduction is allowed for most contributions of clothing and
household items unless the donated property is in good used
condition or better.
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** Earned Income Credit Amounts
Increase (provided by Internal Revenue Service)
Earned income amount.
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** Electric and Alternative
Motor Vehicles (provided by Internal Revenue
Service)
For 2006, the list of vehicles that are qualified hybrid vehicles
for the Alternative Motor Vehicle Credit has been expanded.
The tax credit for hybrid vehicles applies for vehicles purchased
on or after January 1, 2006, and could be as much as $3,400
for those who purchase the most fuel-efficient vehicles.
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** Exemption Amount Increased
(provided by Internal Revenue Service)
The amount you can deduct for each exemption has increased
from $3,200 in 2005 to $3,300 in 2006.
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** Social Security and Medicare
Taxes (provided by Internal Revenue Service)
Wage limits. For social security tax, the maximum amount of
2006 wages subject to the tax has increased from $90,000 to
$94,200. For Medicare tax, all covered 2006 wages are subject
to the tax.
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** New Option to Split Refunds
Between Bank Accounts (provided by Internal
Revenue Service)
Beginning in 2007, a new refund option is available for filers
of Form 1040, Form 1040A, Form 1040EZ, Form 1040NR, Form 1040NR-EZ,
Form 1040-PR, and Form 1040-SS.
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** 2006 Federal Tax Rate Schedules
(provided by Internal Revenue Service)
These tax rate schedules are provided so that you can compute
your federal estimated income tax for 2006. To compute your
actual income tax, please see the instructions for 2006 Form
1040, 1040A, or 1040EZ as appropriate when they are available.
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