Wednesday, January 18, 2012

Can't Miss Tax Deductions

Tax season is beginning to heat up as we move closer to April.  Here's the big question: Are you getting all you can from your tax deductions?

In an article for The Huffington Post, Lisa Greene-Lewis, managing editor of the TurboTax Blog, wrote about the advantages of filing your tax returns early.  She wrote that an estimated 80 percent of taxpayers will get a federal tax refund if they file before the end of February.  How much is that refund, you ask?  It's expected to top $3,000 this year.  That's certainly not chump change.

Lewis also wrote about the value of claiming standard tax deductions.  It's important not to leave any money on the table while filing your taxes.  Lewis offered some deductions you can claim that will help your cause:
  • Job Search Expenses: Most Americans were involved in the job search last year, but many probably didn't know they could claim job search expenses as a deduction.  It's true: As long as you were searching for work in your same profession, you can deduct expenses such as resume preparation, career seminars, and even travel.
  • Dependent Friends: Good news: Your support for your deadbeat roommates can finally pay off!  If they have been out of a job for a while, they may count as a "qualifying relative."  This will allow you to treat them as dependents.
  • Income Tax Credit: The down economy of the past few years has caused the loss of income for many Americans.  If you are counted among that group, you may now qualify for the Earned Income Tax Credit (EIC).  The EIC allows you to keep more of what you earned, and can give you a credit of up to $5,000 depending on the size of your family.
  • State and Local Sales Tax Deduction: If you live in a state with no income tax (Alaska, Florida, Nevada, New Hampshire, South Dakota, Texas, Washington, or Wyoming), you can claim a state and local sales tax deduction.  If you don't live in one of those states, a year of heavy spending may still give you a greater deduction.
Read more in The Huffington Post.

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