It’s not hard to overlook tax deductions buried deep within the thicket of the United States tax code. Most taxpayers think they pay too much in taxes. However most of them might be making things worse by overlooking tax deductions. But you don’t have to spend hundreds of dollars on a CPA to find a lot of tax deductible expenses.
The incredible value of tax deductions
About 46 million U.S. working class individuals who choose to itemize their tax deductions prevent nearly $1 trillion dollars from falling to the hands of the government. About 85 million working class individuals use standard deductions to protect another $700 billion. Many people who use standard write-offs are probably cheating themselves out of money that’s there for the taking in the U.S. tax code. Tax write-offs like mortgage interest, student loan interest, real estate property taxes and sales tax are used normally and regularly. Still, these individuals may be missing out on other deductions.
Tax write-offs inside your career
Many people do not realize there’s a tax break for any expenses caused when looking for a job. The U.S. job market has been terrible recently meaning several people are missing this tax break. With an itemized deduction greater than 2 percent of total adjusted gross income, this can be put in itemized taxes. Any job hunting expenses could be deducted. This is only allowed if the job search is in the very same industry as the previous job. Job hunting expenses cannot be deducted when it is for a first time job. However, any moving expenditures, including 14.5 cents per mile, could be deducted as long as the person is moving over 50 miles for the job. A $2,500 college tuition tax credit is claimed for any person going back to school so that a career change could be made. While a tax break lowers taxable income, a tax credit lowers the taxes owed. A tuition tax credit is given to any single working class individuals making less than $80,000 or married working class ! individuals making less than $160,000.
Some people don't notice deductions
You will find tax deductions that get unnoticed. This contains write-offs for home and family. Are you taking care of elderly parents? As an American, that can mean a huge tax break to consider. If they provide more than half their parent’s financial support and that assistance costs them more than 7.5 percent of adjusted gross income, they qualify for a dependent parent deduction. There have been a lot of U.S. automaker incentives for buying a new car. In 2010, buying a new automobile means you are able to deduct the sales tax, even in case you are not doing an itemized deduction, as long as you made under $135,000. Taxpayers that made energy efficient improvements in their home can get green energy tax credits up to $1,500. Finally, don’t overlook the Making Work Pay tax credit. The 2010 tax year is the last chance to take advantage of the Making Work Pay tax credit. A Schedule M along with the 1040 form will mean singles can take $400 and married couples! can take $800 off of their taxes with the tax credit, which some employers do on their own.
Citations
MSN Money
articles.moneycentral.msn.com/Taxes/CutYourTaxes/the-19-most-overlooked-tax-deductions.aspx?page=2
U.S. News and World Report
news.yahoo.com/s/usnews/20110217/ts_usnews/10hiddentaxdeductionsexposed
ABC News
abcnews.go.com/Business/irs-taxes-2010-tax-credits-deductions-save-money/story?id=12908788&page=2
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