By Cecily O’Connor
RedwoodAge.com

Between protecting the environment and juggling care of elderly parents, baby boomers are due some breaks.

The Internal Revenue Service extends important tax credits related to energy efficiency and dependent care, among other financial expenditures, that boomers would be wise to look into as the April filing date approaches, said Beanna Whitlock, an enrolled agent, and the 57-year-old director of the National Society of Tax Professionals.

“I’m a firm believer that every American should pay their fair share of tax, but not one dime more,” Ms. Whitlock said. Ms. Whitlock and two other tax pros recently provided RedwoodAge.com some of their top tax tips. Here’s what they had to say:

Gift of (care)giving: The federal child and dependent care tax credit can help offset child or dependent care expenses some families accrue in order to work. Boomers may be able to claim the credit if they pay someone to care for Junior (if he is under age 13), or for a spouse or dependent not able to care for himself. The credit can be up to 35 percent of expenses, with the exact percentage based on adjusted gross income.

Keen on green: Homeowners who made their dwellings more energy efficient through insulation or windows are eligible for up to $500 in federal tax credits, said Robert Janes, 57, an enrolled agent in Point Reyes Station, Calif. (The $500 credit is for the 2006 and 2007 tax years combined. However, it’s important to note there are limits for specific items, Ms. Whitlock said. For example, a taxpayer can only get a credit of $200 of the $500 amount for storm windows).

Retirement Reductions. Contributions to individual retirement accounts or Roth IRAs can be made until April 17, and in most cases, are fully deductible for the 2006 tax year. The limit is $4,000, or $5,000 for those who were 50 or older at the end of last year. Income limits for IRA deductions may apply, so it’s smart to talk to a tax professional. However, the forced savings make the accounts attractive all the same, Mr. Janes said. In the meantime, don’t forget to maximize contributions to tax-deferred 401(k) plans, too. The 2007 limit for 401(k) contributions is raised to $15,500.

Career-minded. Boomers who have left corporate life to become self-employed need to be mindful of the tax ramifications, Ms. Robinson said. Keep track off all expenses, and be aware of quarterly estimated tax payments to the IRS. Entrepreneurs starting their own company also should consider talking to a tax pro because there are “several ways of holding a company” that each carries different tax consequences.

Under your nose: Overlooking tax deductions are a big mistake taxpayers of all ages make. Many forget that mileage or supplies purchased for volunteer work, for example, can be deducted. That’s why it’s important to comb through 2006 receipts. You never know what might qualify as a deductible expense, Ms. Robinson said. Check the IRS website, and when in doubt, ask a professional.

Consider alternatives: Don’t forget about the complex alternative minimum tax. It’s a separately figured tax that can eliminate many deductions and credits, thus increasing the tax liability for an individual who would otherwise pay less tax. The danger is that credits could reduce a taxpayers’ income too far down, making them vulnerable to having their taxes calculated with AMT rates. The AMT rate will always be higher than the normal income tax rates of your bracket, Ms. Whitlock cautioned. That’s why it’s important to engage in tax planning throughout the year, she said.

AMT was originally designed to prevent the wealthy from using deductions and credits to dodge paying the IRS. But because of rising incomes, the tax is expected to expand to more than 23 million taxpayers in 2007 from 3.8 million households in 2006, according to the Urban-Brookings Tax Policy Center. AMT could affect more than 30 million taxpayers by 2010 if nothing is done, the center has cautioned.

Said Mr. Janes: “If boomers wanted to spend time lobbying representatives to eliminate or reduce the impact of AMT … that may save them a lot of dollars in the future.”