Tips and Advice on How to Avoid an IRS Refund from the Minnesota Society of Certified Public Accountants

MINNEAPOLIS, March 9 /PRNewswire/ -- If getting an IRS refund is wrong, American taxpayers don't want to be right. Many Americans look at the tax refund as a forced savings plan; in reality it is a no-interest loan to Uncle Sam.

According to the Minnesota Society of Certified Public Accountants (MNCPA), more than 3/4 of Americans will receive an IRS refund this year not realizing there are more productive ways to put your hard-earned income to work.

"When a client receives a refund over a $1000, my first step is to analyze why?" said Tom Alagna, MNCPA member and University of St. Thomas adjunct professor. "There are so many new deductions, credits and special tax breaks available. It's almost impossible for an individual to keep up with the IRS, but with a little planning and research you can strive for a zero balance and create a better financial plan."

Tips to reduce your refund:
-- Evaluate your tax plan -- Are you withholding too much? Are you
taking all the deductions you are owed? Are you taking advantage of
special tax breaks?
-- Consider a home equity line of credit -- Home equity line of credit
interest is tax deductible and the interest rate is often very low.
It can be accessed for a car loan or home improvements.
-- Refer to IRS Publication 17 -- This research is available for free on
http://www.irs.gov/ , Publication 17 summarizes changes and new
deductions for 2006.
-- Make an appointment with a CPA or financial planner -- Doing so will
help you navigate your overall financial situation and prepare a tax
plan.

So if you do receive a refund, is that new boat or Disneyland vacation in order? Not necessarily. Affect your personal bottom-line for the long-term by using these tips recommended by the MNCPA.

-- Pay down high-interest debt -- Credit card interest rates average
13 to 14 percent. While not as much fun, paying down high-interest
debt is one of the smartest moves an individual can make.
-- Fund your retirement -- There are numerous tax advantages and the
money will compound over the years.
-- Establish or replenish an emergency fund -- The economy is up. The
economy is down; jobs are downsized or eliminated. Keep funds in a
liquid investment such as a money market and use only for true
emergencies.
-- Save for college -- Tiny tots become college-bound seniors sooner than
later. Invest tax refund dollars in a Section 529 college savings
plan.
-- Do some preventive maintenance or improvements on your house -- Using
a refund to repair the roof or upgrade your home increases its value
and protects your investment.

Additional tax information and resources are available to the public on the MNCPA Web site ( http://www.mncpa.org/ ) including state and federal tax forms as well as financial planning information for individuals and small businesses. Also on the Web site is a free CPA referral service available to the public. Call 1-800-331-4288 for more information.

About Minnesota Society of Certified Public Accountants

The Minnesota Society of Certified Public Accountants (MNCPA) is committed to serving the public interest with programs that advance the highest standards of ethics and practice within the CPA profession since 1904. The 9,200 member professional organization includes CPAs working in public accounting, business and industry, government, and education.