Income Tax Returns

There are many ways to file your annual income tax return -- more than ever this year, in fact. But virtually all of them have a cost or catch. The best way for you to file is going to depend on your income, the complexity of your situation and how good you are at following directions.

The federal tax bill for President Bush and his wife in 2007 was $221,635. That's how much the Bushes owed on their adjusted gross income of $923,807 that year, according to a joint return released Friday. The Bushes have paid $203,894 so far, which means they owe the government $17,741. Their income total includes a $150,000 advance received by Laura Bush for the children's book she co-wrote with her daughter Jenna. Last year, the Bushes paid $186,378 in federal taxes on income of $765,801.

There's nothing like a little stimulus to get taxpayers to file on time. As of early April, about 9% more federal tax returns had been filed than at this time a year ago, the Internal Revenue Service said. The reason could be the economic stimulus law passed by Congress -- because to get a rebate check you have to file a federal tax return.

Campaigning for president has been very good for Sen. Barack Obama's pocketbook, with his household income jumping from $991,296 in 2006 to $4.2 million in 2007, tax records show. The Illinois Democrat had a net profit from book sales of $3.9 million, according to a copy of a 2007 tax return released Wednesday by Obama and his wife, Michelle. That total includes $169,706 in foreign income from overseas sales of his two best-selling books.

Sen. John McCain reported income of $405,409 last year, but the money he spent on charitable contributions, wages to household staff, alimony and taxes ate up most of that -- showing how his wife, Cindy, helped support a wealthy lifestyle. McCain on Friday released his 2007 and 2006 tax returns, but not those of his wife, whose income from ownership of a beer distributor far exceeds $1 million, according to financial disclosure statements filed previously in the Senate.

Sarah Palin earns more than husband Todd, who takes a lot of deductions for his fishing and snow-machine-racing careers, according to the Palins’ 2007 and 2006 federal tax returns, released Friday. The Alaska governor makes $125,000 a year. Plus, since she took the job in December 2006, she hasn't paid taxes on the more than $17,000 she received in controversial per diem payments for working out of the family's lakeside home in Wasilla -- some 575 miles from the capital of Juneau.

The McCain household wasn't immune from the weakening economy, according to tax returns released Friday: Cindy McCain's income fell by nearly a third last year. But the family's considerable investments, estimated at more than $100 million, and a steady flow of salary, dividends, capital gains and interest are probably preventing any economic pain at home. In 2007, Cindy McCain reported income of $4.2 million and ended the year with the federal government owing her almost $1 million.

Amalia Cerrillo has made her living helping other people pay their taxes. Sometimes she showed them how to get on the tax rolls in the first place, helping clients without Social Security numbers apply for a special ID they needed to file their returns. Some were illegal immigrants who got jobs using fake or stolen information, but that wasn't an issue for the Internal Revenue Service: Legal or not, everyone must pay their taxes. Nor was it an issue for Cerrillo: "I'm not here to judge them.

Legislation designed to fix some pension, healthcare and energy problems ushered in a host of minor tax breaks -- and a handful of tax traps -- that will affect 2006 returns. That could make filing returns more rewarding, but even more bedeviling than usual this year. "Sales taxes, college tuition and out-of-pocket expenses for teachers are all deductible again, but they're not on the tax return," said Mark Luscombe, principal tax analyst with CCH Inc.

Most American taxpayers are likely to get an extra $30 to $60 in their refund checks this year, thanks to a one-time credit available to anyone who made long-distance phone calls. But nine people whose returns were filed electronically from a Riverside halfway house for drug and alcohol abusers last month sought phone-tax refunds totaling $439,632 -- an average of $48,848 each, according to the Internal Revenue Service. Fat chance, tax investigators said.