Take Advantage of Tax Laws to Save Money, CPAs Tell Taxpayers

The American Institute of Certified Public Accountants advises taxpayers to take advantage of the opportunities offered by the nation's tax laws to save money. Do it now, the AICPA says, because today is the day American taxpayers will stop working for the federal government and start working for themselves, according to the Tax Institute, which annually calculates Tax Freedom Day(R).

Today is Tax Freedom Day(R)

WASHINGTON, April 23 /PRNewswire-USNewswire/ -- The American Institute of Certified Public Accountants advises taxpayers to take advantage of the opportunities offered by the nation's tax laws to save money. Do it now, the AICPA says, because today is the day American taxpayers will stop working for the federal government and start working for themselves, according to the Tax Institute, which annually calculates Tax Freedom Day(R).

Tom Ochsenschlager, AICPA vice president of taxation, says, "Take Uncle Sam up on his offer! Implement these tax strategies today to save yourself money."

The five easy, tax-saving strategies the AICPA recommends are:

-- Stash as much money as you can into a retirement account such as a
401(k) plan or Individual Retirement Account. What you contribute to
these accounts won't be taxed until you withdraw it. If you choose to
invest in a Roth IRA, the dollars you invest now will be taxed now,
but they'll be tax free when you withdraw them.

-- Don't make Uncle Sam an interest-free loan! If you received a tax
refund this year for the taxes you paid last year, you probably are
having too much money withheld from your paycheck. Work with your
employer to fine tune your withholding so you are having only as much
withheld as you will owe.

-- Research the education savings options available to parents and other
family members. 529 plans are designed to boost college savings; no
deduction is available for the contributions, but the money grows tax
free in the plan, and the money paid from these accounts for qualified
education expenses is not taxable. A Coverdell Education Savings
Account can be used to pay for qualified elementary, secondary and
higher education expenses; the contributions to Coverdell accounts
aren't deductible, but the contributions grow tax free. Education
costs can be offset by eligible taxpayers by taking either the Hope
Scholarship Credit or Lifetime Learning Credit. Tax deductions are
available to qualified taxpayers for up to $2,500 of interest paid on
student loans.

-- Go green and save money. Buying an eligible hybrid or other
alternative-fuel car or truck may qualify you for a tax credit.

-- Make a gift to your kids. You and your spouse can each contribute up
to $12,000 to each of your children without triggering the gift tax
law. Children can report up to $1,800 of unearned income, such as
interest from a $12,000 investment in a CD, at their marginal tax rate
which is likely to be less than yours.

The American Institute of Certified Public Accountants (http://www.aicpa.org) is the national, professional association of CPAs, with more than 350,000 members, including CPAs in business and industry, public practice, government, and education; student affiliates, and international associates.

It sets ethical standards for the profession and U.S. auditing standards for audits of private companies; federal, state and local governments; and non-profit organizations. It develops and grades the Uniform CPA Examination nationwide.

The AICPA is the sponsor of a national public-education effort called 360 Degrees of Financial Literacy (http://www.360financialliteracy.org), designed to improve the financial understanding of Americans at all age levels. A related campaign, Feed the Pig (http://www.feedthepig.org), co-sponsored with the Ad Council, is designed to help Americans ages 25 to 34 years old save for long-term financial security.

The AICPA maintains offices in New York; Washington, D.C.; Durham, N.C.; Ewing, NJ; and Lewisville, TX.