BusinessInsider shows us 7 common tax filing mistakes.

The Wall Street Journal Journal gave an update on the "wash sale" rule.  If you're selling stock in your brokerage account at a loss be aware of this rule.  And, our usual disclaimer-always consult your tax advisor.

 • It's a wash. IRS officials issued a ruling late last year answering a question raised in this column many years ago. Suppose you sell a stock at a loss in your regular taxable account and then buy the same stock a few minutes later for your IRA. Can you deduct your loss? Or have you violated what's known as the wash-sale rules and are thus unable to deduct the loss? (A "wash sale" typically occurs when you sell or trade securities at a loss and buy the same thing, or something "substantially identical," within 30 days before or after the sale.)
 

The IRS's decision: If you did that maneuver, you did indeed violate the rules and can't deduct your loss.

The IRS web site has  helpful tips for seniors and individuals on disability.

Standard Deduction for Seniors - If you do not itemize your deductions, you can get a higher standard deduction amount if you and/or your spouse are 65 years old or older. You can get an even higher standard deduction amount if either you or your spouse is blind. (See Form 1040 and Form 1040A instructions.)

Taxable Amount of Social Security Benefits -When preparing your return, be especially careful when you calculate the taxable amount of your Social Security. Use the Social Security benefits worksheet found in the instructions for IRS Form 1040 and Form 1040A, and then double-check it before you fill out your tax return. See Publication 915, Social Security and Equivalent Railroad Retirement Benefits.

Credit for the Elderly or Disabled - You must file using Form 1040 or Form 1040A to receive the Credit for the Elderly or Disabled. You cannot get the Credit for the Elderly or Disabled if you file using Form 1040EZ.

This is a tough time of year for me....I get all my tax information in the mail, put it in a folder and then uh, start my tax procrastination.  I dread sitting down to do my taxes!  It's not going to get any easier.  Think about our huge budget deficits, and the wave of boomers applying for Social Security and Medicare.  Jonathan Clements of the WSJ provides some tax tips for retirement accounts.

2008 is right around the corner-so it's time to look at a few year end strategies that could save you money.  The Wall Street Journal provides some ideas to reduce your taxes.

There are some powerful advantages. First, you can use your losses to soak up your gains on a dollar-for-dollar basis with no limit. Second, if your losses exceed your gains, you typically can deduct as much as much as $3,000 a year of net capital losses from wages and other ordinary income. (The limit is $1,500 a year if you're married and filing separately from your spouse.) Additional net losses are carried over into future years.

Your 401k or 403b provider is required to do a 20% withholding if you do a distribution from your retirement plan.  Often they will encourage you to do a "direct rollover" into an IRA to avoid the tax withholding. Here's why- any distribution from an IRA is taxed at 10% and you even have the option of instructing your custodian not to withhold taxes.  It's your decision. 

The folks at TurboTax explain the 20% withholding rule.

Folks appear to be under the impression that once they've had taxes withheld on distributions from their 401(k)s or retirement plans, they've "already paid taxes" on the withdrawals and don't need to report the withdrawal or the income tax on their tax returns... "I've already paid the tax on this; why do I have to pay it again?"

Here's the straight talk on this situation: in general, when a 401(k) or 403(b) plan pays a distribution to you, the federal government requires that 20% of the distribution is withheld from the distribution for income taxes. This is just like the federal income tax withheld from your W-2... it's kind of an "advance payment" on the income taxes that will be due on the taxable income you're getting as a result of the withdrawal. There are certain exceptions from this withholding rule, like when you receive payments over time or when it's a distribution due to hardship.

I like this approach!  As a matter of fact I've been doing this for years-I thought it was called procrastination. 

Bankrate.com's 7-day tax-filing plan.

Day 2: Reduce taxable income
Welcome back. Day two probably will be the fullest of our tax-filing plan, but it's worth it. Today we start slashing your tax bill.

Pull together all your exemption, deduction and tax credit info. These items will help you whittle down your income to the actual amount that the Internal Revenue Service will tax.

You get to take $3,300 off the top for each person you claim as an exemption on your return. That's generally a pretty easy determination: you, your spouse and any dependents, which generally means your kids. But did you care for a parent, even one who didn't live in your home? You may be able to claim an exemption for that person, too.

Next, there are some expenses that any taxpayer can take without bothering with extra paperwork. These include certain IRA contributions, student loan interest, alimony payments or moving costs. Collect the backup for these nonitemizing expenses first.

Now check the standard deduction allowed for your filing status. Most taxpayers use this rather than bothering with tracking every expense to itemize. If the standard amount works for you, great! You may be through today in less than an hour.

But if you find itemizing will help cut your taxes, you've got a bit more work to do.

The Public Good IRA Rollover Act would make the IRA rollover provision permanent. It also would allow donors age 59½ or older to make contributions tax free from their IRAs to a charitable remainder trust, pooled income gift or charitable gift annuity. In addition, gifts could be made through the IRA rollover to donor-advised funds, supporting organizations and private foundations.

We'll keep you posted on this bill which was just introduced in both the House and Senate this week.

Here's the 2006 1040 Instruction booklet.  It's only 87 pages this year.

We've received numerous e-mails this week with questions on 1099-R forms.   If you did a distribution or direct rollover from a 401k, 403b or other employer plan or did a distribution from your IRA you should have received this form. 

Often investors will do a direct rollover and then take a distribution from their IRA which will actually generate two 1099-R forms; one from your employer and the other from your IRA custodian.

Bankrate.com answers questions on the 1099-R.

What the 1099-R tells you
Box 1 of the form shows the total amount of your retirement fund that was distributed. The more important amount to you right now is in box 2a, the taxable amount. For direct rollovers from one qualified plan to another, that amount is generally zero.

Also check box 7, the distribution code. A letter or number should be here, explaining to the IRS exactly why your retirement money was taken out and just what was done with it. Direct rollovers to another qualified plan are coded with the letter "G." This includes transfers to another company's 401(k) plan, a tax-sheltered 403(b) annuity, a government 457(b) plan or an IRA.

The code lets the IRS know that the money was never in your hands, an important point when it comes to taxes on transferred retirement funds. If you had taken the money out yourself, taxes would have been withheld.

I haven't done my taxes yet...but, if you have and you're getting a refund this year, maybe it's time to check your withholding.   I just noticed the withholding calculator tool on Kiplinger.com.  Check it out.

I've got a big stack of mail on my bookshelf right now.  Year-end statements, tax documents etc.   I'm just about ready, but before I fire up Turbo-Tax...I'll check out 10 tax essentials for 2006 from Forbes.com.