Commonly Missed Deductions and Credits

Before you file your taxes this year – start looking for credits and deductions.  Millions of people miss out on deductions each year.  Missed deductions mean more money in the government’s pocket and less in yours.  If you think you pay enough taxes as it is, do whatever you can to get a little extra back this year.  Start here, with a few commonly missed deductions.

Health Insurance:
Add the cost of your health insurance premiums to your other medical expenses.  If your overall medical expenses exceed 7.5 percent of your Adjusted Gross Income (AGI), you’ll be able to deduct them.  This can lead to huge savings. 

Energy Savings:
The Energy Savings Home Improvement Credit is a dollar-for-dollar reduction in tax.  Receive 30 percent in credit for energy savings-related expenses throughout the year.  They include certain roofs, air conditioning, windows and doors, skylights, water heaters, insulation, doors, and more.  You can get back as much as $1500 with this credit.

Moving Expenses for a Job:
While job hunting expenses are not deductible, costs required to get you to that new job are.  To qualify, your job must be at least 50 miles away from your old home.  You can deduct the cost of getting you (and your goods) to the new place, including 16.5 cents per mile for driving your own car.  Don’t forget about parking fees and tolls.

American Opportunity Credit:
The American Opportunity Credit helps parents and students pay for tax expenses.  This credit will be available until at least 2012 and is available for up to $2500 in college expenses.  This credit is even better than the Hope credit that it replaced with higher income limits and bigger breaks.  According to irs.gov, “The full credit is available to individuals whose modified adjusted gross income is $80,000 or less, or $160,000 or less for married couples filing a joint return.”

Charitable Contributions:
Whether it’s cash or household goods, make sure to keep track of all charitable contributions.  No receipt means no deduction.  Keep receipts/statements for cash donations, and make sure to get a written receipt for donated household goods and clothes.