Useful Tips and Write Offs to Maximize your Tax Deductions

Revenue Robot — Wed, 18 Feb 2009 05:54:57 +0000

(photo: credits)

I came across a great article the had some very useful tips to help you maximize your tax deductions if you haven’t filled your taxes this year. Below are 5 of the 14 overlooked ways to slash your taxes provided by Wallet Pop…

If You’re Going Green …
If you made an effort to go “green” in 2008, Uncle Sam wants to put a few extra dollars in your pocket. Unlike deductions against your income, these are actual tax credits … so again every penny ends up in your pocket. Probably the biggest tax credit — between $200 and $3,500 — comes from purchasing a new hybrid vehicle. The weight of the vehicle and how much fuel it saves will have an impact on the size of your tax credit. A new energy-efficient roof for your home can also generate a tax credit of up to $500. If you bought new energy-efficient appliances for your home, these can generate tax savings, too.
If You Pay PMI …
When you take out a first mortgage with less than 20% down, you pay a monthly private mortgage insurance (PMI). If you took your mortgage on or after January 1, 2007, that PMI expense is now deductible. Simply use Line 13 on Schedule A — the same form that you use to deduct mortgage interest and property taxes. Your lender should make this easy by telling you the amount of your PMI premium in Box 4 of your Form 1098. This deduction is scheduled to disappear after 2010, so make the most of it while it lasts!
If You Lost Your Job …
Did you look for a job in 2008? If you looked for a job in the same field and at the same level as the one you left, you might be able to deduct your job search expenses as “miscellaneous itemized tax deductions.” And even if didn’t get the job, your expenses may still be deductible. Possible deductions include agency fees, resume preparation, advertising, postage, long-distance phone calls, and travel. You can claim these job-seeking expenses as long as the amount of all miscellaneous itemized tax deductions is more than 2% of your adjusted gross income (AGI).
Tax Preparation Fees
That’s right… ANY costs pertaining to tax planning. These are easy to forget because they really fall under the category of “miscellaneous” itemized expenses. You can write off your tax preparation fees, plus portions of any legal or accounting fees related to your taxes. Meaning if you sat down with an attorney to review your estate, and you spent a part of that time reviewing the tax implications, that time would be tax deductible.
If You’re a Working Parent…
This one is a tax CREDIT, not a deduction. (A tax credit actually reduces your tax bill dollar for dollar.) If you pay for childcare, including daycare or nanny services, you can reduce your taxes up to $3K for a single child or up to $6K for two or more children under the age of 13. The amount of the credit ranges from 20 to 35% of your child care costs, depending on your gross income. For example, if your income is $43K or more, you can claim a 20% credit on your childcare costs. So if you have one child and you spend $8K a year in childcare costs, you can save 20% off the first $3K — or $600. As always, certain “rules” apply.

If you haven’t filed your taxes yet there are tons of places in and around your area that stay open late so you can get them done. In addition to not having your taxes done yet here is a site offering to pay up to $250 towards the preparation of them.Similar Posts:

Revenue Robot » write offs

Useful Tips and Write Offs to Maximize your Tax Deductions