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taxmap/instr/i1040gi-005.htm#TXMP2755073e Before You Hang Up

If you do not fully understand the answer you receive, or you feel our representative may not fully understand your question, our representative needs to know this. He or she will be happy to take additional time to be sure your question is answered fully.

By law, you are responsible for paying your share of federal income tax. If we should make an error in answering your question, you are still responsible for the payment of the correct tax. Should this occur, however, you will not be charged any penalty.

taxmap/instr/i1040gi-005.htm#TXMP2da490aa Before You Fill In Form 1040

For details on these and other changes for 2006 and 2007, see Pub. 553.

taxmap/instr/i1040gi-005.htm#TXMP45361778 What's New for 2006

taxmap/instr/i1040gi-005.htm#TXMP653fba84 Credit for federal telephone excise tax paid.

If you paid the federal excise tax on your long distance or bundled telephone service, you may be able to request a credit. See the instructions for line 71 on page 60.

taxmap/instr/i1040gi-005.htm#TXMP768968b0 Alternative minimum tax (AMT) exemption amount increased.

The AMT exemption amount is increased to $42,500 ($62,550 if married filing jointly or a qualifying widow(er); $31,275 if married filing separately).

taxmap/instr/i1040gi-005.htm#TXMP160e3ada Direct deposit of refunds.

If you choose direct deposit of your refund, you may be able to split the refund into two or three accounts. See the instructions for line 74a on page 61.

taxmap/instr/i1040gi-005.htm#TXMP12a9cb81 New credit for residential energy improvements.

You may be able to take a residential energy credit for amounts paid in 2006 to have qualified energy saving items installed in connection with your home. See the instructions for line 52 on page 41.

taxmap/instr/i1040gi-005.htm#TXMP22ccd6cf IRA deduction expanded.

You may be able to take an IRA deduction if you were covered by a retirement plan and your 2006 modified adjusted gross income (AGI) is less than $85,000 if married filing jointly or qualifying widow(er). You and your spouse, if filing jointly, may each be able to deduct up to $5,000 if age 50 or older at the end of 2006.

For purposes of taking an IRA deduction, earned income includes any nontaxable combat pay received by a member of the U.S. Armed Forces.

taxmap/instr/i1040gi-005.htm#TXMP04caa586 Elective salary deferrals.

The maximum amount you can defer under all plans is generally limited to $15,000 ($10,000 if you only have SIMPLE plans; $18,000 for section 403(b) plans if you qualify for the 15-year rule). The catch-up contribution limit increased to $5,000 ($2,500 for SIMPLE plans). See the instructions for line 7 on page 22.

taxmap/instr/i1040gi-005.htm#TXMP2eef0717 Standard mileage rates.

The 2006 rate for business use of your vehicle is 44 cents a mile. The 2006 rate for use of your vehicle to get medical care or to move is 18 cents a mile.

taxmap/instr/i1040gi-005.htm#TXMP400869d7 Alternative motor vehicles.

You may be able to take a credit if you place an alternative motor vehicle (including a qualified hybrid vehicle) or alternative fuel vehicle refueling property in service in 2006. See Forms 8910 and 8911. You can no longer take a deduction for clean-fuel vehicles or refueling property.

taxmap/instr/i1040gi-005.htm#TXMP2971459f Earned income credit (EIC).

You may be able to take the EIC if:

• A child lived with you and you earned less than $36,348 ($38,348 if married filing jointly), or
• A child did not live with you and you earned less than $12,120 ($14,120 if married filing jointly).

The maximum AGI you can have and still get the credit also has increased. You may be able to take the credit if your AGI is less than the amount in the above list that applies to you.

The maximum investment income you can have and still get the credit has increased to $2,800.

See the instructions for lines 66a and 66b that begin on page 46.

taxmap/instr/i1040gi-005.htm#TXMP7e54e75d Personal exemption and itemized deduction phaseouts reduced.

Taxpayers with adjusted gross income above a certain amount may lose part of their deduction for personal exemptions and itemized deductions. The amount by which these deductions are reduced in 2006 is only of the amount of the reduction that would otherwise have applied.

taxmap/instr/i1040gi-005.htm#TXMP03bbc899 Tax on children's income.

Form 8615 must be used to figure the tax of children under age 18 with investment income of more than $1,700. See the instructions for line 44 that begin on page 36. The election to report a child's investment income on a parent's return and the special rule for when a child must file Form 6251 also now apply to children under age 18. See pages 12 and 40.

taxmap/instr/i1040gi-005.htm#TXMP56f543d7 Foreign earned income tax worksheet.

If you claim the foreign earned income exclusion or housing exclusion on Form 2555 or Form 2555-EZ, you must use the Foreign Earned Income Tax Worksheet to figure your tax. See page 37.

taxmap/instr/i1040gi-005.htm#TXMP356d0b07 IRA distribution for charitable purposes.

A distribution from your IRA that was made directly by the trustee to a qualified charitable organization may be nontaxable if you were at least age 70 when the distribution was made. See the instructions for lines 15a and 15b on page 25.

taxmap/instr/i1040gi-005.htm#TXMP0807d0db New credits for clean renewable energy bonds or Gulf tax credit bonds.

You may be able to take a credit based on the face amount of any clean renewable energy bond or Gulf tax credit bond you hold during 2006. The amount of any credit before tax liability limits must be included as interest income. See Form 8912.

taxmap/instr/i1040gi-005.htm#TXMP20da4149 Mailing your return.

You may be mailing your return to a different address this year because the IRS has changed the filing location for several areas. If you received an envelope with your tax package, please use it. Otherwise, see Where Do You File? on the back cover.

taxmap/instr/i1040gi-005.htm#TXMP73fc5c0f Expired tax benefits.

The following tax benefits have expired and will not apply for 2006.

• Deduction for educator expenses in figuring adjusted gross income.
• Tuition and fees deduction.
• District of Columbia first-time homebuyer credit (for homes purchased after 2005).

At the time these instructions went to print, Congress was considering legislation that would reinstate these expired tax benefits. To find out if this legislation was enacted, and for more details, go to www.irs.gov, click on More Forms and Publications, and then on What's Hot in forms and publications, or see Pub. 553.

Previous Page:  Instructions for Form 1040 - Making the Call Next Page:  Instructions for Form 1040 - What's New for 2007 Use     to find additional instances of index items.