In this Issue:* 9 Ways to Increase Your Gas Mileage Pending Existing Home Sales Fell In January IRS Easing Rules on Liens for Late Taxpayers (Please leave us a comment at the bottom of the newsletter.)

9 Ways to Increase Your Gas Mileage

With gasoline prices rising everywhere on a seemingly daily basis, we all need to work at finding ways to not only save money at the pump, but also reducing our nation’s dependence on oil and oil imports.

Reducing the amount of driving we do — by carpooling, using public transportation and combining trips — has the greatest effect on how much gas each person uses. But there other things we can all do to improve fuel economy.

Go easy on the pedals
Speeding, braking and rapid acceleration waste gas. Depending on the type of vehicle, poor driving habits can negatively affect fuel economy between 5 percent and 33 percent. Based on the current national average of $3.12 per gallon (for regular gasoline), driving sensibly, and not like a race car driver, can lead to an equivalent gas savings of between 16 cents and $1.03 per gallon.

Slow down
Gas mileage decreases above 60 miles per hour. According to fueleconomy.gov, for every five miles per hour that exceeds 60 mph, drivers pay an equivalent of about 24 cents more for each gallon of gas. While each vehicle has its own optimal speed for fuel efficiency, speeding can result in 7 percent to 23 percent reduced fuel economy. Driving at slower speeds can save 21 to 71 cents per gallon.

Leave extras at home
An additional 100 pounds in your car can reduce gas mileage by up to 2 percent. The reduction is relative to the vehicle’s weight: Smaller vehicles are more affected by increased weight than larger ones. For every 100 pounds in extra weight, plan on spending up to 6 cents more per gallon. So clean out your trunk of all that extra stuff you’re just hauling around with you everywhere you go.

Use cruise control (when appropriate)
According to Edmunds.com, using cruise control under appropriate conditions (avoiding use during especially hilly terrain) can improve fuel economy by up to 14 percent. That’s a savings of about 43 cents per gallon.

Turn off the car
Idling gets zero miles per gallon and collectively consumes several billion gallons of fuel per year, according to the U.S. Department of Energy. The California Energy Commission advises that vehicles should be turned off if the expected wait will be longer than 10 seconds, since an idling vehicle can burn as much as one gallon of gas each hour. Turning the car off can save about 5 cents per minute.

Check tire pressure
A little bit of vehicle maintenance can go a long way in improving gas mileage. According to the U.S. Department of Energy, 1.25 billion gallons of gasoline — approximately 1 percent of total consumption — are wasted each year on under-inflated tires. Tires can lose about 2 pounds per square inch per month. Each tire that is under-inflated by 10 psi reduces fuel economy by about 3.3 percent. Four tires that are under-inflated by 10 psi, then, would reduce a vehicle’s fuel economy by a substantial 10 percent at an added cost of 31 cents per gallon.

Follow the guidelines in your vehicle’s owner’s manual (these recommendations also appear on a sticker inside the driver’s side door jamb) — and not what is stamped onto the tire itself.

Replace spark plugs
The National Institute for Automotive Service Excellence indicates that bad spark plugs can decrease fuel economy by up to 30 percent, and can cost drivers up to about 94 cents per gallon at today’s prices. If a car’s gas mileage suddenly drops, there’s a good chance it’s because of misfiring spark plugs.

Check alignment
Misaligned tires drag instead of rolling freely. Improper alignment can reduce fuel efficiency by as much as 10 percent — about 31 cents per gallon. In addition, the tires can wear out more quickly. Tires that are out of balance (symptom: vibration in the steering wheel) can cause uneven tire wear, which can result in lower gas mileage. Tires should be balanced and rotated according to the vehicle’s owner’s manual to improve tire performance and fuel economy.

Fill your tank early in the morning or late at night
Fuel is dispensed by volume. If you fill your tank when it is coolest outside — early in the morning or late at night, and avoid the heat of the day — the fuel will be more dense. As a result, you will get more gas for the same amount of money.

Reducing the amount of driving we do, whether it’s by carpooling or foregoing an unnecessary trip, is perhaps the most effective way to decrease the amount of gas each person uses and make fill-ups at the gas station last longer. Proactive steps can be taken to improve fuel efficiency by paying attention to and changing gas-guzzling driving habits, and following a vehicle’s maintenance schedule. Improved gas mileage is good for you, good for your car and good for the environment.

Do you think rising oil (gasoline) prices could derail the U.S. economic recovery? Share your thoughts and views by clicking the comment link below.

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Pending Existing Home Sales Fell in January

The number of Americans signing contracts to buy previously owned homes fell in January, a sign the industry that triggered the recession was struggling at the start of 2011.

The index of pending home resales dropped 2.8 percent after a revised 3.2 percent decrease the prior month that was initially reported as a gain, figures from the National Association of Realtors showed recently. The median estimate in a Bloomberg News survey of economists called for a 2.3 percent decrease.

Foreclosures that are driving down prices and unemployment at 9 percent signal the housing market may not make much headway this year. Interest rates that are rising pose another challenge to real estate, which may lag behind the rest of the economy this year.

Pending home sales were projected to fall after an originally reported gain of 2 percent in December, according to the median of 39 forecasts in the Bloomberg survey. Estimates ranged from a drop of 6 percent to an increase of 1.5 percent.

From January 2010, pending home sales were down 4.4 percent.

Housing demand see-sawed last year, reflecting a boost from a national home buyer tax incentive of as much as $8,000 that gave way to a plunge in sales by mid-2010 as the credit ended.

Pending home sales are considered a leading indicator because they track contract signings. Purchases of existing homes are tabulated when a contract closes, typically a month or two later.

Sales of previously owned homes, which now make up more than 90 percent of the market, unexpectedly climbed in January to the highest level in eight months, led by rising demand for distressed properties. Sales increased 2.7 percent to a 5.36 million annual rate, according to figures from the National Association of Realtors.

Distressed sales accounted for 37 percent of the total, the highest proportion in 12 months, and all-cash sales amounted for 32 percent, the highest since the group started tracking that category in 2008.

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IRS Easing Rules on Liens for Late Taxpayers

The Internal Revenue Service says it’s trying to help people who are struggling to pay delinquent tax bills, so it’s reducing the number of property liens and easing rules for small businesses to enter into installment agreements.

As the economy has soured, the agency has filed an increasing number of liens on property owned by delinquent taxpayers. The IRS filed nearly 1.1 million liens in the budget year that ended in September, compared with 426,000 in 2001.

The steps announced recently will double the amount of back taxes a person can owe before facing a possible lien. Previously, taxpayers who owed at least $5,000 and ignored numerous IRS notices would get an automatic lien placed on their property. Under the new policy, the threshold is increased to $10,000.

The change will make it easier for people to have liens withdrawn once tax bills are paid or they start paying under certain installment plans. More taxpayers can settle their tax debt for less than they owe, if they meet certain income and debt requirements.

Small businesses with larger delinquent tax bills will be eligible for 24-month payment plans. Previously, the tax bill had to be less than $10,000; now it’s up to $25,000.

The agency believes the changes “will help people trying to get right with their taxes and we think it strikes the right balance to protect the interests of the government,” said Doug Shulman, the IRS commissioner.

The changes, however, don’t go far enough, said Nina E. Olson, the national taxpayer advocate, an independent watchdog within the IRS. The agency will still file liens automatically, without analyzing whether a lien is likely to generate any tax revenue, she said.

“The IRS often files liens against taxpayers who own insignificant or no property interests to which the liens can attach. As a result, the lien filing simply damages the taxpayer’s financial viability and impairs future tax compliance without any corresponding revenue benefit,” Olson said in a statement.

The IRS expects to process more than 140 million tax returns this year, and the vast majority will qualify for tax refunds. But with the economy still weak, and the national unemployment rate at 9 percent, many taxpayers who owe money will be unable to make timely payments.

Liens are notices filed in land records to ensure the government can collect back taxes when property is sold. They also alert potential creditors and employers that property owners owe back taxes.

They can remain on credit reports for years — even once tax bills are paid and liens removed — hurting the ability of taxpayers to get loans or even a job, Olson said.

Do you think this easing of liens for late taxpayers will help or hurt? Please post your comments or thoughts on the matter by clicking the “comment” link below.