New Opportunities to Cut Your Tax Bill

Just keep in mind these credits are limited to the first 60,000 hybrids that the manufacturer sells. So if you buy the 60,001st car, your credit will decrease and eventually the available credits will be phased out completely.

Check out the IRS Web site for a full listing of the hybrid cars and their corresponding credits.

Junk the Junk

It used to be much easier to donate the "junk" in your home to charity and get a charitable deduction for it. Well, no surprise, Congress decided that "junk" wasn't worth a deduction.

The new rules for 2006 say that your donations of used clothing and household goods must be in "good used" or "better" condition or you can't deduct them as a charitable contribution. Of course the law doesn't define what it means to be "good used" or "better," so you have to use your best judgment.

You can presumably still donate that unwanted clothing and those usable household items as long as the clothes are not full of holes and the household items actually work.

So go through your house and donate things like furniture, electronics, appliances and linens that you no longer use to beef up your charitable deduction. Just make sure they're not, well, junk.

And just to be safe, keep a list of all the stuff you donate and take a picture of it all. Then throw both in your tax file so you have proof of the condition of the items you donated if Uncle Sam ever comes knocking.

Credits Up in the Air