Watching bloopers at the end of a movie is quite funny, but messing up on your taxes and having a blooper in your tax return is not so funny. Have you ever messed up your tax return and missed out on a deduction you could have claimed? Well, a lot of us have made this same mistake.
Here are the Top Ten Tax Write Offs:
1. State Sales Tax
The choice is between state and local income taxes or state and local sales tax. If your state does not impose an income tax, you will benefit from deducting the state sales tax. This may really be a nice deduction if you made a large purchase like a vehicle, boat, or airplane. There are also some other large items that qualify for this deduction.
2. Non-Cash Contributions
Unfortunately we had a lot of opportunities to donate to charity this year and I’m mostly referring to the disasters abroad. If you donated through your credit card, don’t forget to deduct the gift given to charity. This also applies to household goods, clothing, and other donated items that aren’t cash or paid by credit card. The big reminder here is to get a receipt.
3. New Points on Refinancing
With the housing crisis going on, a lot of homes have been refinanced. Any points you pay to refinance your home can be tax deducted on a monthly basis over the life of the loan.
4. Educator Expenses
If you are an educator, you can claim a deduction for as much as $250 worth of materials. This applies not only to teachers; it also includes aides, instructors, and principals. You can purchase books, supplies, and also computer equipment.
5. Student Higher Education Expenses
The American Opportunity Credit and Lifetime Learning Credit allow a deduction for as much as $4,000. The American Opportunity Credit is worth as much as $2,500 and the Lifetime Learning Credit is worth as much as $2,000. You will have to compare between taking the deduction for post-secondary education or taking the above mentioned credits. It’s one or the other, so compare wisely.
6. Energy Saving Home Improvement Credit
We’re all trying to lower our energy bills and if you made energy efficiency improvements to your home, you may be able to claim this credit. First of all, the improvements have to be performed on your primary home. You will be able to claim 30% of the cost for improvements like windows, furnace, skylights, water heaters, central air conditioning, and others. The credit is worth as much as $1,500.
7. Casualty Deductions
What a year we have experienced with this crazy weather. Some have endured floods, fires, earthquakes, mud slides, and snowstorms. If the President has declared your area a disaster area, you may be able to claim a credit on your losses.
8. Retirement Tax Credit
You may be able to claim a credit for as much as 50% of the first $2,000 you put into a retirement account. This credit was designed to help low-income and moderate-income people get a kick start in saving.
9. Moving Expenses for your First Job
If you have to move more than 50 miles away to take your first job, you can deduct the cost of getting yourself and household goods to your new location. Keep your receipts for toll charges and parking and record your mileage.
10. Home Buyer Credit
I know, you can’t believe I put this on the list, but some Americans may not know this credit is available because all the rules have changed this year. This gets tricky, so be careful. There’s a credit for new home buyers and one for long term home owners who recently purchased a new home.
Well folks, those are my top ten tax write offs. I hope you haven’t filed your taxes already and hey, if you did, file an amendment. I will say, you wouldn’t have missed one deduction or credit if you had used online tax software. The software searches for these things and believe me, it doesn’t miss one opportunity to save you money!
The best online tax preparation company I know of is TurboTax Online. If you haven’t tried tax software before, go take a look and see how much you could have saved