Greetings,

First of all I want to let you know that I will shortly be changing internet providers. Please change your address book to use my linda@llhcpa.com e-mail address. If you have any problems, please let me know so I can get things straightened out. This will not be the only notification that you receive. I apologize in advance for the duplication.

I'm sure we've all been reading and watching the news about Hurricane Katrina. It doesn't matter whether these people got out in time or not, they are still wiped out and have no home, no job and no possessions except what they took with them. I hope you will all remember them in your prayers and donate to your favorite charity to help them out.

Here's the tax tip:

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Factor new tax credits into your planning

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Last month President Bush signed an energy bill that contains tax incentives you need to be aware of as you do your 2005-2006 tax planning. The provisions of interest to most taxpayers and businesses include the following:

* For 2006 and 2007, a tax credit for making home improvements that will increase energy efficiency, such as adding insulation or energy-conserving doors and windows.

* For 2006 and 2007, a tax credit for installing residential solar water heaters.

* For 2006 through 2010, a tax credit for purchasing an alternative fuel vehicle, such as a hybrid gas/electric car or truck. The current $2,000 deduction for the purchase of a hybrid vehicle is replaced by the credit in 2006.

* For 2006 and 2007, a tax credit for contractors who build energy-efficient homes and for manufacturers of energy-efficient appliances.

If you’re planning to buy a vehicle or to make home improvements, you’ll want to get details on these new credits. Waiting until 2006 to make your purchase may be to your tax advantage. For specifics on the new energy credits and guidance in your situation, give me a call.

Until next time,

Linda