DeKALB | Despite 61 percent of American taxpayers claiming they are taking advantage of tax benefits, the IRS estimates $1 billion in credits and deductions are overlooked each year, according to an H&R Block press release.

“The goal of H&R Block is to inform taxpayers about the new and often overlooked things they can do this year to improve their tax situation,” said Mark Ernst, chairman and chief executive officer of H&R Block.

Six tax tips from H&R Block

1. Certain hybrid vehicles and energy-smart home improvements help the environment, and the IRS is providing incentives to encourage taxpayers to do their part. Taxpayers who purchased a new hybrid vehicle in 2006 are eligible for a tax credit of $250 to $2,600, depending on the make and model of the car. A one-time credit of $500 is also available for taxpayers who purchased certified energy-efficient windows, doors, furnaces or air conditioners during 2006.

2. Anyone who owned a land-based or mobile telephone at any point since March 2003 is eligible for new, automatic $30 to $60 standard credit. Taxpayers can claim more than the standard credit if they kept long distance phone bills from March 2003 to July 2006, enabling them to report the actual amount of excise taxes they paid.

3. The IRS continues to reward eligible taxpayers for stocking away money. Qualified taxpayers can claim the Saver’s Credit for up to half what they contribute to their retirement plans and make it count this tax season toward an IRA or other eligible retirement plan, or up to $1,000, or $2,000 for joint filers, while other taxpayers are eligible for incentives linked to catching up on retirement savings later in life. Taxpayers have until the April 15 filing deadline to contribute to their retirement plans and make it count this tax season.

4. Only 13 percent of tax payers say they’re aware of new tax law changes that make it easier to retire, such as the IRS allowing refunds to be directly deposited to as many as three bank accounts.

5. As many as 7.3 million Americans who were eligible for the Earned Income Tax Credit (EITC) in 2006 didn’t claim it, according to the IRS. The complexity of the credit and lack of awareness are among reasons why taxpayers fail to take advantage of it. The credit is worth as much as $4,500. Taxpayers with no dependants could qualify for more than $400.

6. Tougher rules concerning the documenting of contributions could affect taxpayers who routinely deduct charitable donations. Use checks or credit cards for donations so paper proof of documentation is available. Donated clothing and household items must be in “good used condition” and cash donations of $250 or more now require documentation from the organization or a bank record, such as a cancelled check, to be deductible.