Tax season has arrived, and that means it’s time to get your paperwork together. Chances are that you can’t take any more deductions for tax year 2010 (except with some contributions to certain retirement plans), but you can re-evaluate your expenses from 2010. There are a number of tax deductions that many people overlook — especially if they are doing their own taxes. Here are 8 tax deductions to consider before you finalize your tax return and file it:
- Costs Related to Job Hunting: If you are looking for a job, some of the expenses you incur might be tax deductible. Just make sure you are looking for a job in the same field that you already work in.
- State Sales Tax OR State and Local Income Taxes: You have a choice to deduct the sales tax you paid in your state, or to deduct the amount you pay in state and local income taxes. You can’t do both, however. The state sales tax deduction works best for those who lives in states that don’t collect income tax. Hope you’ve saved your receipts…
- Charitable Expenses: You know that you get a deduction for charitable contributions. But you can also take deductions for the out of pocket expenses associated with your donation of time. If you buy items to assemble hygiene kits, you can deduct those costs. You also get to deduct 14 cents per mile when you drive your car to help out a charity.
- Jury Duty Pay Sent to Employer: In some cases, your employer might keep on paying you while you are on jury duty. This often means that the money you receive for jury duty goes to the employer after the fact — but you still have to report it as income. You can offset it by reporting it as income, and then taking a deduction for what was paid back to your employer.
- Travel Expenses as a Military Reservist: If you are in the reserves, or a member of the National Guard, you can deduct certain travel expenses.
- Deduction for Medical Expenses: If you are self-employed, you can take a deduction for the health insurance premiums you pay. Additionally, if you spent money out of your pocket on medical expenses, you can itemize those costs. However, the amount you spend out of pocket has to amount to at least 7.5% of your AGI for 2010. Realize that this changes to 10% with the health care reform.
- Points for Refinancing: If you paid mortgage points on your refinance, those may be tax deductible. Many people know that they get a deduction for the points when they buy a home, but if you pay points for a refinance, you might get a deduction as well. Make sure to double check the process and make sure you are eligible.
- Moving Expenses: When we moved across the country, we got an above the line deduction on our moving expenses. If you are moving more than 50 miles away from your old home, and starting a new job, you can deduct your expenses. This includes parking fees, tolls, and moving company expenses. Plus, you can deduct 16.5 cents per mile when you drive your own vehicle.
Before you take any of these tax deductions, make sure you meet the qualifications. You can check with www.irs.gov or with a tax professional.