Uncle Sam tries to screw you all year long. But tax deductions are your chance to get him back! The more deductions you can claim, the more cash you get back. And who doesn’t like getting a fat tax refund?!
Here are some tax deductions that you might have overlooked. Don’t leave a single penny on the table!
1. Medical mileage – You surely didn’t forget to add up your medical expenses, but what about mileage to and from appointments? You can deduct $0.20 per mile for medical trips, and you can also include parking fees and tolls (PDF: 2007 Publication 502).
2. Educator expenses – Are you a teacher? You can deduct up to $250 of out-of-pocket expenses for books and supplies. And you don’t even have to itemize!! Just put the amount on line 23 of Form 1040 (Tax Topic 458).
3. Student loan interest – Most young adults have at least a little school debt. At least you can deduct the interest you pay on those loans. If you paid more than $600 in interest during the year, your lender should send you Form 1098-E, detailing your interest. This is another cool deduction that doesn’t require itemizing (Tax Topic 456).
4. Donations of goods – Did you give some old household items to Goodwill? Be sure to get a receipt, and you can deduct the value of those items. There’s even a cool online program (It’s Deductible) that helps track and value those donations (Tax Topic 506).
5. Jury pay – Nobody likes jury duty, but at least you can deduct the pay! If your employer paid your full salary while you served AND you turned over the jury duty pay to your employer, you’re eligible to deduct it. You can even claim this deduction on Form 1040A!
6. Health insurance premiums – Everyone can add health insurance premiums to their medical expenses deduction. And if you’re self-employed, you can deduct 100% of these premiums without itemizing! You have to love easy deductions like that!
7. Moving expenses – Did you move more than 50 miles for a full-time job? Deduct it! This includes self-employment, as long as you fulfill the “time” test (working enough hours each week) (PDF: Publication 521).
8. Higher-education – Did you pay college expenses this year? If you earned less than $65,000, you can deduct up to $4,000 of those expenses above-the-line (Publication 970).
9. Job hunting costs – If you’re looking for work in the same field in which you’re currently employed, deduct your expenses. There are some nuances here, but it’s definitely worth accounting for (Publication 529).
10. Tax prep fees – These are typically deductible in the year you pay them. For your 2007 tax return, you can deduct your 2006 tax preparation fees. This includes the cost of your software, accountant, and even e-filing.
What’s your favorite tax deduction?
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