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2006 Late Tax Filing: Essential Tax Facts

2006, you may recall, was not a very good moment for Pluto.

No, not the classic Disney pooch, he’s just fine. That’s Pluto, as in the former planet named for the god of the underworld. It got demoted to runt of the litter that year.

That’s presumably not unlike what voters did to George Allen, the once Senator from Virginia who improbably macacaed his way to electoral defeat in 2006.

2006 may also have been the year you forgot to file a tax return for. Well, it’s not too late to get it done and, unlike Pluto, get right with the powers that be.

Remember that the IRS only hands out refunds from the last three years. So if you were hoping for some cash back from filing your 2006 tax return that is now off the table.

Still, you will want to take full advantage of any credits coming your way as they will reduce the amount of any tax you may owe. We’re here to help you do just that.

Here are the key credits and deductions you should pay attention to as you file your 2006 return:

• The one-time Telephone Excise Tax Refund is available to anyone who paid long-distance excise taxes for phone service between February 28, 2003 and August 1, 2006. You can choose a credit for either the standard amount set by the IRS, based on the number of exemptions you claimed on your return, or you can opt to itemize a deduction for the actual amount you paid in excise taxes during the period, whichever is highest.
• Those who bought a new hybrid car in 2006 can claim the Alternative Motor Vehicle Credit, worth between $162.50 and $3150 based on the make, model year, model name, and date of purchase of the vehicle. Note that the credit phases out after the first quarter from the date on which a manufacturer sells the 60,000th qualifying vehicles it made independent of model
• The Nonbusiness Energy Property Credit gives a non-refundable tax credit to taxpayers who made energy efficient improvements to their main residence in 2006. These includes installing energy-efficient exterior doors, skylights, insulation, central air conditioning, and other energy saving measures in your home. The credit is equal to 10% of the expenses incurred on qualified energy efficiency improvements during the year and to the full amount of the residential energy property costs paid in 2006. However, note that the total maximum credit amount allowable for all tax years is $500.
• The Residential Energy Efficient Property Credit is a non-refundable credit worth up to $2,000 for installing solar panels, solar water heating property, or fuel cell power plants in your main home.
• For 2006, the Standard Deduction is increased to $5,150 for single filers, $7,550 for heads of household, and $10,300 for married couples filing jointly. The Personal Exemption amount rises to $3,300.

Congress tardily extended several tax breaks set to expire at the end of 2005. As a result, many taxpayers faced an unusually complicated procedure for claiming the Tuition Deduction, the Educator Expense Deduction, and the State and Local Sales Tax Deduction - even more reasons to file your 2006 taxes with PriorTax and let us do the hard work. You can get started here!