Tax Tips: A Guide to Your 2005 Taxes

From the new loophole for donating your car to the congressional decision on tsunami charity, tax season can be a confusing maze of bylaws and regulations. ABC News has cut through the legal speak to spell out some of the more confusing and unique tax decisions you may encounter this year.

ABC News correspondent Richard Davies and "Good Morning America" financial contributor Mellody Hobson have compiled a list of tax tips that might be helpful to Americans when it's time to file tax returns.

Tax Tips

  Car Donations The rules for giving a car to charity have changed this year. If you donated a car last year, it's up to you to come up with the fair market value of the car. On the 2004 tax return, you can take the full Blue Book value of the car. If you give away your car this year, you can only get what the charity receives when it sells your car at auction, which will almost certainly be a lower figure. However, if you donate the car to a church, a school or a charity, and they use the car instead of selling it, you can get the full Blue Book value. The Internal Revenue Service says that to qualify for this provision, the use of the car must be considered "significant use," but does not specify what that means.

  Getting an Immediate Refund From Your Tax Preparer If your tax preparer offers you an immediate refund check, what they are actually offering is called an anticipation loan, and they will probably charge you a loan fee and a finance charge, essentially taking money directly from your pocket. By waiting two or three weeks to have the refund check sent to you or direct deposited into your bank account, you can avoid these fees.

  Is It Good to Get a Big Refund? If you get a big refund every year from the IRS, you're probably paying too much in withholding tax. Ask your employer for a W-4 form, and then run through the instructions to see if you can cut your withholding. This could help you take home more money in each paycheck and allow you to collect interest on the money during the year.

  Direct Debit If you are filing electronically and you want to file your tax return early, but would rather delay payment, you have the option of including an authorization for a direct debit from either your checking or savings account. It's free, and the funds will be withdrawn electronically whenever you want, as long as it's before April 15.