January is the time when W-2s, 1098s, 1099s, and K-1s start to arrive and most tax filers begin to gather together their cancelled checks, bills and other documents to prepare for the task of “rendering unto Caesar”. Today’s TAX CARNIVAL will deal with getting ready to prepare your 2006 federal tax return.
Let’s start off with the basics. Gina L. Gwozdz of GINA'S TAX ARTICLES answers the question “Do I Need To File a Tax Return?”.
William Perez of TAXES.ABOUT.COM provides an excellent comprehensive review of one of the most important tax documents you'll need when preparing your tax return in “Understanding Your W-2”.
As I have noted in a previous posting, in addition to a Wandering Tax Pro the “blogosphere” also has a Tax Man, a Tax Girl, a Tax Mama (is there a Tax Papa?), a Tax Playa, a Tax Prof, and a Tax Guru. I expect any day now to come across a blog by Deducto the Tax Dog or Ira the Tax Cat, not to mention the Tax Monkey. The TAX PLAYA helps to answer the age old question ‘To Itemize or Not To Itemize’ in his posting on “Itemized Deductions: Taxes for Grown-Ups”.
At literally the last minute Congress extended some tax breaks that had expired – after the IRS had “gone to press” with the 2006 forms and instructions. Allison at QUEERCENTS explains where and how to report the extended tax breaks on your 2006 forms in “Tax Forms Missing Lines for Important Deductions”.
While I am sure you are smart enough to be able to prepare your own return, you don’t want to take any chances. You want to make sure your return is prepared correctly, so you will seek the help of a professional tax preparer. Kay Bell at DON'T MESS WITH TAXES provides some help with the task of "Picking A Tax Pro".
The main reason you need a tax pro is because the Tax Code is too damned confusing. One of the sources of confusion is the fact that many deductions and credits are phased out based on your AGI (Adjusted Gross Income) or MAGI (Modified Adjusted Gross Income) – and the phase-outs differ from item to item. JLP of ALLFINANCIALMATTERS provides a helpful table on some of the "Phase-Outs For Tax Benefits".
Here at the WANDERING TAX PRO (if I may be so bold as to include my blog in the Carnival) I review “What To Give Your Tax Preparer (Part One and Part Two)”.
Once the ball drops on One Times Square at midnight on December 31st and the New Year is rung in there is very little that can be done to cut your tax bill. Scott from SCOTT ON MONEY talks about something you can still do in 2007 to reduce your 2006 tax liability in “Tax Move You Can Still Use – 2006 IRA Deadline Is Not the End of the Year”.
And now for what residents of New Orleans know as lagniappe – a little something extra. These postings have nothing to do with our Carnival topic, but are tax-related items of interest nonetheless.
January is also the time to start thinking about your 2007 taxes. Joe Kristan of ROTH AND COMPANY TAX UPDATES makes the excellent point that "Procrastination is Expensive".
If you think taxes are high now you should see what the top rate was at the end of WWII! Jim at BLUEPRINT FOR FINANCIAL PROSPERITY takes “A Look At Historical Federal Tax Brackets”.
Before we go let’s have some commentary on “How Political Blackmail Enhances Tax Law Complexity” from Prof. James Edward Maule, author of MAULED AGAIN. Right on, JEM!
I have been told you should ‘always leaving them laughing’. I enjoy the many tax-related comic strips that Kerry M. Kerstetter posts on The TAX GURU. Let me end the Carnival with this one that I thought was especially humorous. I use it as my screen saver.
I hope you found this Tax Carnival helpful. Keep your eye out for the next one.