Don’t Forget These 10 Tax Deductions

Are you doing your own taxes this year? Do you review your tax return even if you have it prepared by a CPA, friend, or H&R Block? Probably not a bad idea to give it a once over. If you do, consider some of these tax deductions and make sure you are taking full advantage. A little time reviewing could mean big dollars in deductions and then more return of your tax dollars. Here are some of the federal tax deductions most overlooked by tax filers:

Points Paid on Home Refinancing

There were many opportunities to refinance your home this past year with rates so low. If you refinanced your home and paid points to get your mortgage, you get to deduct those points gradually over the life of the loan. If you sold a home this year in which you had previously refinanced the loan and paid points, you can deduct all the previously undeducted points.

Sales Taxes on New Vehicles

If you bought a car, truck, or motor home in 2009 you can deduct the sales taxes paid. Like houses, we saw an artificial increase in the number of vehicles purchased this year due to the Cash for Clunkers program. There are maximums, of course, and income limitations that apply. This can be taken as an itemized deduction, or as part of a higher standard deduction.

First Job Moving Expenses

Recent college graduates should pay attention here. If you moved more than 50 miles after you graduated college to transition into a full-time job, you can deduct the cost to move. This includes moving truck/service costs, your own gas mileage, tolls, parking, etc.

With as much job turnover we’ve had this year due to the economy, it’s important for the non-first timers to take advantage of their available deductions, both searching and moving expenses.

State Sales Taxes

You have a choice. You can deduct either state income taxes or sales taxes on your federal taxes. Therefore, if you live in a state that doesn’t have an income tax, you should definitely take advantage of the sales tax deduction. Of course, there are some states with low income taxes and it’s not as easy to determine which is the better choice. Or you could have made some hefty purchases this year and your sales taxes are sky high. To be sure you’re taking the best deduction, plug your numbers in the IRS Sales Tax Deduction Calculator.

Out-of-Pocket Charity

We all remember the big charitable contributions. It’s easy to dig back through our checks and receipts for those items. But what about the little charity efforts. They can add up over a year. Examples include: food you purchased to make something for a non-profit, 14 cents per mile on any driving for charity, child care for you to attend a charitable event.

Student Loan Interest

Most borrowers remember to pay this if they are making the payments. However, even if you are the parent of a child with student loan debt and you are making the payments, your child would be able to deduct the interest paid from their taxes.

Property Taxes for Non-Itemizers

Like the sales taxes on new vehicles, there is a bump up in the standard deduction for people who are paying property taxes but don’t have enough deductions to itemize. Bottom line: make sure you get your deduction for paying property taxes regardless of your standard deduction election.

Want to see even more? Check out TurboTax’s 11 Most Overlooked Tax Deductions

Jury Duty Pay

If you served on a jury this past year, and your employer took your jury duty pay and took it out of your paycheck make sure you are getting that money deducted from your taxable income. If your employer didn’t reflect it in your W-2 then you need to claim it separately on your return.

Military Reservist Travel Expenses

Members of the National Guard and reservists spend a lot of time traveling between their homes and the military installations where they serve. To honor their extra effort, they get a deduction for their travel expenses. If the travel includes an overnight stay and it’s more than 100 miles from home, they can deduct those expenses.

Educator Expenses

Qualified educators get a sweet above-the-line deduction of as much as $250 for educations supplies and materials you bought in 2009. This includes supplies, books, and computer equipment. Teachers of k-12, aids, special instructors, and even the princiPAL qualify for this nice deduction. Mrs. PT, a teacher, says it should be more than $250.

Make sure you consult  a tax professional to be sure that these deductions apply to you and your situation.

Source: Kiplinger.com Photo by alancleaver_2000

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