Tax tips to save you money

Many people anxiously await the arrival of spring, a welcome respite from winter weather thanks to its moderate climate and the rebirth of wildlife and foliage. But while spring does usher in bluer skies, it also marks the arrival of April 15, otherwise known as Tax Day.

Whether you're used to getting money back or giving it up in droves, chances are you want to find more ways to pay less during the year and possibly increase what you get back once the mercury starts rising this spring. Fortunately, the Internal Revenue Service offers plenty of lesser-known deduction options that might be part of your everyday life.

· Deduct gasoline costs. Escalating gas costs understandably have many people concerned. But the amount you drive might actually help you when tax time comes. While the rate changes each year, in 2005 the mileage rate for business users was 40.5 cents per mile. Consult the IRS or your tax preparer if you use your vehicle solely for business purposes. It's a good idea to save gas receipts as well, both to get an accurate total of what you can deduct and in the unfortunate instance you ever find yourself the subject of an audit by the IRS.

· Deduct based on the car you drive. Hybrid cars are not eligible for the electric vehicle credit, but might be eligible for a clean fuel deduction. This is a one-time deduction per vehicle (so if you've used it already and still own the same vehicle, you're ineligible) and is greatly limited to distinct makes and models, which have included the 2005 Ford Escape and the 2001-05 Toyota Prius. While the deduction for certified vehicles was once $2,000, in 2006 the IRS will only grant a $500 deduction.

In addition to fuel-burning deductions, SUVs used for business purposes (not including a daily commute) might be eligible for a depreciation deduction. Again, it's best to consult the IRS or a tax preparer to see if you qualify.

· Work from home deduction. If you have a home office that is used strictly for work, you can deduct the cost of home-office expenses. For instance, a personal computer you buy and use for business can be deducted. However, if your son or daughter uses that PC to do his or her homework, you're no longer allowed to deduct the cost of the computer. Other expenses, such as rent, insurance, mortgage interest, and utilities might also be deductible depending on your situation.

· Charity pays off. In addition to being able to deduct monetary donations to charity, vehicles donated to charity can also be deducted. When donating a car to charity, you're entitled to deduct the fair market value of the vehicle on your tax return. The IRS defines fair market value as the amount you'd expect to get in return for the car had you simply sold it. Oftentimes, charities that accept vehicle donations will provide you with an amount you're allowed to deduct, as well as the necessary tax forms you'll need to attach to your return.

To learn more, visit the IRS Web site at www.irs.gov.