The IRS deemed that frequent flyer miles and hotel reward points are tax-free until further notice. However, cash rewards are another matter. First, cash rewards are not gross income. Second, they reduce basis. Third, they produce a deduction when you donate them to charity.

Tax credits are best. They reduce your taxes dollar for dollar.

Now, you can pocket a 30 percent tax credit of up to $1,500 when you install qualifying energy approved windows, doors, HVAC, insulation, water heaters, roofs, and similar property in your principal residence.

The IRS ruled that this real estate broker who gives commission rebates and commission reductions at closing does not have to give Form 1099s to his customers who receive the rebates and reductions.

New rules increase the tenant’s ability to first use shorter depreciation periods during the life of the lease and then write off the undepreciated balance of leasehold improvements at the end of the lease. The proper application and intertwining of the new rules enable both landlords and tenants to put cash in their pockets.

In 1935, the self-employment tax topped out at $60. In 2006, the first part of the self-employment tax tops out at $14,413, but the 2.9 percent Medicare part continues after that without limits. Good tax planning for the self-employment tax is like an annuity. It gives you monetary returns—year after year—every year you are in business. So, plan now and consider everything from choice of entity to hiring your children.

Rebates have become common. The tax treatment of a rebate by the salesperson depends on whether you write a check or receive a reduced commission and whether you do this rebate for charitable or promotional purposes.