Hidden Tax Deductible Items
Tax deductible items are overlooked on most occasions even if you have someone like me who has been preparing income tax returns for 18 years prepare your taxes. If you are doing them yourself then you definitely need this information.
1. Miles driven for medical related incidences are deductible as an itemized deduction. The rate is $.20 for 2007 and $.19 for 2008. Miles are totaled for doctor visits and hospital visits. Start adding them up and you will be amazed. Think about it on a weekly or monthly basis and then multiply by 52 or 12 respectively.
2. Most know that mortgage interest is deductible but did you know the interest you pay on a 2nd home is also deductible? Savvy tax payers will include their motor home in this deduction if it has a working bathroom and kitchen.
3. Charitable donations are often overlooked since we do this out of the kindness of our hearts. But when it comes tax time sit down and figure these up. Include donations to Deseret Industries and vehicles donated to different foundations.
4. Expenses incurred during a move that is job related are a tax deductible item. Ask your tax preparer about this one as there are certain tests to be satisfied. If you qualify include expenses for transportation and storage of household goods. Also travel including lodging from your old home to your new home is deductible.
5. The alimony deduction is often over looked because many people do not want to think about a painful divorce. The amount rewarded for child support is not deductible though.
6. Student loan interest paid on loans for education is deductible. People often miss this one because a lot of changes take place after graduation and this deduction gets over looked. With rising education costs the student loan interest really adds up.
7. Most of us know that we can deduct our real estate taxes on our home but did you also know the state income taxes withheld from your W-2 are also deductible. Also the state income taxes paid during the year for a prior year should be included as a deduction.
8. You can create a capital loss on your individual tax return by deducting worthless debts. These are loans you have made to family and friends that have not been repaid. Capital losses go nicely against capital gains
9. Losses from business endeavors will be covered in other articles but for the present let me just say do not be timid to take losses on line 12 of your 1040 which arise from self employment. If your venture was intended to turn a profit then you should be taking the deduction.
10. When a family member moves into another home you own often you will forget to report it. The incentive to reporting is that this is a tax deductible item. You can usually create a loss to be reported on your 1040 when these deductions are properly accounted for.
Filed under: Business