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Category — Taxes

Top 50 Most Overlooked Tax Deductions

Tax time is quickly approaching. Hopefully you’ve begun to organize some of your information. Everyone is gathering their receipts and wishing they’d kept better tax records. It’s such a wonderful time of the year.

Well if taxes have you down, here’s your silver lining. Browsing through some blog archives I found a post from JLP at AllFinancialMatters of the 50 most easily overlooked tax deductions.

50 of the Most Easily Overlooked Tax Deductions

1. Accounting fees for tax preparation services and IRS audits

2. Alcoholism and drug abuse treatment

3. Amortization of premium on taxable bonds

4. Appraisal fees for charitable donations or casualty losses

5. Appreciation on property donated to a charity

6. Casualty or theft losses

7. Cellular telephones – more on this here.

8. Cleaning and laundering services when traveling

9. Commissions and closing costs on sale of property

10. Contact lenses, eyeglasses, and hearing devices

11. Contraceptives, if bought with a prescription

12. Costs associated with looking for a new job in your present occupation, including fees for résumé preparation and employment of outplacement angencies

13. Depreciation of home computers

14. Dues to labor unions

15. Education expenses to the extent required by law or your employer or needed to maintain or improve your skills

16. Employee contributions to a state disability fund

17. Employee’s moving expenses

18. Federal state tax on income with respect to a decedent

19. Fees for a safe-deposit box to hold investments (e. g., stock certificate)

20. Fees paid for childbirth preparation classes if instruction relates to obstetrical care

21. 50% of self-employment tax

22. Foreign taxes paid

23. Foster child care expenditures

24. Gambling losses to the extent of gambling winnings

25. Hospital services fees (laboratory work, therapy, nursing services, and surgery)

26. Impairment-related work expenses for a disabled individual

27. Improvements to your home

28. Investment advisory fees

29. IRA trustee’s administrative fees billed separately

30. Lead paint removal

31. Legal fees incurredin connection with obtaining or collecting alimony

32. Long-term care insurance premiums

33. Margin account interest expense

34. Medical transportation, including standard mileage deduction and lodging expenses incurred for medical reasons while away from home

35. Mortgage prepayment penalties and late fees

36. Out-of-pocket expenses relating to charitable activities, including the standard mileage deduction

37. Health insurance premiums is self-employed

38. Penalty on early withdrawal on savings

39. Personal liability insurance for wrongful acts as an employee

40. Points on a home mortgage and certain refinancings

41. Protective clothing required at work

42. Real estate taxes associated with the purchase or sale of property

43. Seller-paid points on th epurchase of a home

44. Special equipment for the disabled

45. Special schools and separately stated fees for medical care included in tuition

46. State personal property taxes on cars and boats

47. Subscriptions to professional journals

48. Theft or embezzlement losses

49. Trade or business tools with life of 1 year or less

50. Worthless stock or securities

Source: 50 of the Most Easily Overlooked Tax Deductions

February 13, 2007   No Comments

Income Tax Advice: What Should I keep?

Income taxes are fast approaching. I’ve stumbled across some great information from the National Tax Advice Day website.

Records to hold on to:

  • General financial documents: You should keep pay stubs, W-2 forms, records of tips earned, receipts for big dollar items such as the purchase or sale of an automobile or home, records of investments along with contributions to retirement accounts, bank and brokerage statements, and 1099 forms.
  • Receipts for deductible items: When making payments toward a deductible item by credit card, electronic funds transfer or check, you’ll need to record the check number, dollar amount, payee’s name and date of the transaction. If you make a payment in cash you should get a signed and dated receipt showing the amount and reason for the payment.
  • Insurance and medical records: Hold on to papers regarding insurance claims and medical expenses along with dates and specifics as to what was paid for and when.
  • Theft or loss documentation: Theft loss should be documented, including value, the date the property was first noticed missing and proof that it was yours.
  • Gambling records: Gambling records should state the type of gambling activity, the amount won or lost, address or location of the establishment, names of others present with you and the date.
  • Charitable records: Charitable contributions of goods such as clothing or household items require a receipt, as do cash contributions of more than $75 when you receive goods or services in return for the donation. In addition, you must have written confirmation of any cash donation of $250 or more before you can deduct it. Be sure to log out-of-pocket expenses for charitable work such as: mileage, parking fees, tolls, bus or taxi fares. Record the name of the charity, the date of the expenses and the amount.
  • Self-employment records: If you are self-employed or use your home for business, you will need to keep a special set of records. Consult with one of our tax professionals for additional information.
  • It’s a good idea to keep your records in order by date, broken down by category. Organizing your receipts, pay stubs and various financial forms as the year goes along will make it easier to get the numbers you need when it’s time to file your tax return. Several software programs on the market are designed to help you maintain records; however you should still hold on to original receipts and tax forms. It’s a good idea to use a folder, envelope or binder to keep all of your records for the tax year together and then store these yearly files away in boxes or on shelves for later reference.
    You should keep your records a minimum of three years but our tax professionals recommend a minimum of seven years. Even though you may not need to hold on to these records for tax purposes, you may wish to maintain them for proof to creditors or for use in insurance claims. The IRS does recommend that you keep copies of your W-2 forms until you’re eligible for retirement in case there’s a discrepancy.

    January 30, 2007   No Comments