Make sure no tax deduction goes overlooked

It’s easy to overlook tax deductions buried deep within the thicket of the United States tax code. Millions of Americans over-pay their taxes yearly by overlooking tax write-offs. However you don’t have to spend hundreds of dollars on a CPA to find a lot of tax deductible expenditures.

Tax deduction values

Instead of taking the standard tax deductions, about 46 million U.S. taxpayers will itemize. This means the government ends up losing about $1 trillion in tax dollars. Standard write-offs are used by 85 million working class individuals to take another $700 billion away. A lot of people who use standard deductions are most likely 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 people might be missing out on other write-offs.

Job expenses in tax deductions

Many people do not realize there is a tax break for any expenditures brought on when looking for a job. The United States job industry has been terrible recently meaning many 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 exact same industry as the previous job. Unless a first time job hunter is moving over 50 miles for the job with 14.5 cents per mile and moving expenses deducted, first time job hunters cannot deduct job hunting expenses. When going back to school for a career change, working class individuals can make a deduction too. Only $2,500 of college tuition is in the tax credit though. While a tax deduction lowers taxable income, a tax credit lowers the taxes owed. There’s a threshold of income for anyone getting a tax credit. This tuition tax credit is only! accessible if a couple filing jointly makes less than $80,000 or a single taxpayer makes less than $80,000.

Tax deductions a lot of people do not realize

Taxpayers often overlook tax write-offs related to home and family. As more Americans take care of their elderly parents, they become eligible for a substantial tax break. A dependent parent deduction is given to any person that provides over half of the financial support to their parents while paying more than 7.5 percent of adjusted gross income on this person. United States automakers have been offering a lot of incentives, and for those who purchased a new car in 2010 and earned $135,000 or less, the sales tax can be deducted, even without detailing write-offs. Up to $1,500 could be given in a green energy tax credit for tax payers. This is only if energy-efficient home improvements were done. The Making Work Pay tax credit was available too. The 2010 tax year is the last chance to take advantage of the Making Work Pay tax credit. This tax credit is often taken care of by employers who withhold less, but singles can take $400 off their tax bill and married couples ca! n save $800 by completing Schedule M along with the 1040 form.

Information from

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