| With tax time here, now is the time to consider how | | | | canceled check or credit card/debit card receipt to be |
| you want to claim -- the standard deduction or file an | | | | appropriate for purposes of record-keeping. |
| itemized income tax return. Why should you do this? | | | | 6. Other itemized deductions: Florida doesn't have an |
| It's simple. Often overlooked deductions can make a | | | | income tax, so for the year 2009 Form 1040, you may |
| HUGE difference in lowering your tax bill if you decide | | | | deduct sales taxes you pay. You can either use your |
| to itemize. | | | | actual sales taxes paid or use the IRS table. If you |
| The standard deductions are fine for those who have | | | | don't itemize, and use the IRS table, then you can also |
| an uncomplicated tax situation. But the amount of your | | | | deduct the sales tax you paid on big ticket items such |
| mortgage interest payments, state taxes, property | | | | as Cars, Furniture household items like a new kitchen. |
| taxes, charitable contributions and hurricane losses, if | | | | Also, if you are a teacher, you may deduct up $250 |
| any, could be more than the standard deduction that is | | | | for any school supplies you purchase. This year the |
| given. What does this mean? If you do not itemize, you | | | | energy tax credit has been extended, so if you |
| may not save as much as you are entitled to. With this | | | | purchased a new water heater, air conditioner, solar |
| in mind, you should take a look over the following list of | | | | device, or impact windows, you might be entitled to a |
| often missed credits and reductions before you start | | | | $1500 tax credit |
| the process of completing your 2009 tax return: | | | | 7. Capital Losses: With the market downturn in 2009, |
| 1. Education Expenses: There are many education | | | | you can deduct up to $3000 in NET losses on |
| related deductions and credits available to you if you | | | | investments. Any losses in excess of that may be |
| are making tuition payments, paying off your college | | | | carried over to 2010. |
| degree or student loan interest or just saving for your | | | | 8. Earned Income Credit: Those taxpayers whose |
| child's education. You then owe it to yourself to check | | | | income is below a certain level and who have |
| out the explanation of education tax benefits available | | | | dependents may also qualify for additional tax credits. |
| on the IRS website. | | | | If the credit results in a refund, the IRS will mail it to you. |
| 2. Deductions for Home Office: Are you self | | | | 9. Education and Child Care Credits: Depending on your |
| employed? Is your home office your principal place of | | | | circumstances, you may be eligible for tuition payments |
| work? Is your gross income more than your related | | | | for your dependents' college expenses. For those of |
| deductions? You should then be able to claim this | | | | you who have children in daycare, there is also a credit |
| deduction. Are you employed by a company? If so | | | | for the amount you pay to your daycare provider. You |
| you can deduct the home office ONLY if it is for your | | | | MUST have a receipt from the provider listing their |
| employer's convenience. taxes You MUST also pass | | | | name, address, amount you paid and their Tax |
| the "exclusive use" rule to qualify for deducting a | | | | Identification Number. |
| portion of your home's expenses, including mortgage | | | | 10. Medical deductions: Be sure to include your |
| interest, real estate taxes or rent, utilities, property | | | | payments for medical insurance if you receive |
| maintenance (mowing, snow removal) or even repairs. | | | | Medicare. You may also be able to deduct medical |
| Caution, this is a RED HOT issue for the IRS so be | | | | insurance premiums, co-pays, other out of pocket |
| certain you pass the "exclusive use rule". If you don't | | | | expenses, hospital, doctor, dentists and any other |
| have an office in your home, you may still deduct your | | | | medical visits. Remember that there is a 7 ½% |
| mortgage interest and real estate taxes on both your | | | | take away before you can itemize. |
| main residence and any second home. | | | | 11. LASTLY: Be sure to include ALL your W'2's, Form |
| 3. Deductions for Charity: You can deduct all that you | | | | 1099'sand any other documents which report income |
| have given to charity, especially if you have given cash | | | | to you, such as bank or brokerage statements. |
| gifts, or in-kind donations of clothing, toiletries, food or | | | | Credit card debt help. |
| appliances that you can then deduct at fair market | | | | Tax Deduction Checklist |
| value. You should go through your receipts and your | | | | The best tax deductions checklists are found in three |
| credit card statements to make sure you don't forget | | | | places: |
| all that you have given. Only donations to 501 (c)3 | | | | 1) Your past years' tax returns |
| organizations qualify. If you donate items other than | | | | 2) With your tax professional |
| cash and the amount is over $500, you must have a | | | | 3) Through an online tax website |
| receipt from the organization who received your | | | | The IRS website provides plenty of useful information |
| donation. Also remember that the IRS will want to see | | | | on tax filing which could end up saving you a lot of |
| proof of cash donations, such as checks, stubs or | | | | money on this year's tax return. Take a few minutes |
| statements from the charity. | | | | to go over all the information you have on taxes so |
| 4. Miscellaneous Expenses: Did you know that | | | | you can save yourself the most in the end. |
| gambling losses, job search expenses, safe deposit | | | | CHOOSE YOUR TAX FILING METHOD! You may |
| fees, subscription to investment publications and even | | | | wish to hire a tax professional if you have had any |
| tax return preparation expenses could be claimed as | | | | major changes to your income such as an inheritance, |
| tax deductions? Also, unreimbursed business | | | | lottery winnings, an investment windfall, or the like, or |
| expenses may be eligible to be claimed as a | | | | simply feel overwhelmed at the thought of the task. |
| deduction. Your total miscellaneous expenses, | | | | On the other hand, if your goal is to prepare your own |
| however, must exceed 2% of your adjusted gross | | | | tax return, there are great software programs for help |
| income to qualify. | | | | with tax preparation, such as TurboTax, Quicken, or |
| 5. Don't pay in cash: Cash may be convenient but it's | | | | TaxAct. These programs are inexpensive and will |
| also practically guaranteed to be forgotten come tax | | | | walk you through your tax return with a series of |
| time, unless you're one of those folks who's great at | | | | questions that make it a relatively painless process. |
| writing down every single purchase. In some cases, if | | | | INFORMATION PROVIDED ABOVE MAY NOT BE |
| you do not get a receipt when you pay in cash, you | | | | OF USE TO YOU AND THEREFORE YOU SHOULD |
| will be unable to make a deduction. When you can, | | | | CONSULT A TAX PROFESSIONAL CONCERNING |
| write out a check or use your debit card so you can | | | | YOUR ELIGIBILITY TO USE A DEDUCTION. EVERY |
| prove the purchases for the doctor visit, charitable | | | | PERSON'S SITUATION IS UNIQUE. |
| donations and business expenses; the IRS considers a | | | | |