5 tax-saving deductions & credits
Wednesday, October 10, 2012
I do our taxes and the hubby cheers me on, usually by chanting "Deduct! Deduct!"
After all these years I've finally convinced him that tax credits are better than tax deductions because they reduce your actual tax liability dollar for dollar. But he reminds me that it's still more fun to yell "deduct" than "claim a credit."
So I humor and welcome his tax-time support and then round up tax-saving deductions and credits under the umbrella term of tax breaks.
Over the years, I've run into some that folks tend to miss. Today's Countdown to Oct. 15 takes a look at a few of these missed tax saving opportunities.
And to emphasize how they can help you trim your tax bill, today's Weekly Tax Tip is a list of overlooked tax breaks.In keeping with the number of days left to file, here are five of my favorite sometimes forgotten deductions and credits.
1. If you looked for work, round of all those receipts -- resume consultations, copies of the C.V. itself, phone calls to follow-up job leads and the like -- for your job search expenses. They might be deductible as a miscellaneous expense on Schedule A.
2. Congratulations! Your job hunt was successful and you packed up your stuff and headed off to New Town, USA, for your new job. Be sure you claim your moving expenses. The especially good tax news here is that you don't have to itemize to claim these costs.
3. You weren't so lucky on the job front. So sorry. But because your income was lower, you might be able to claim the Earned Income Tax Credit, oftern referred to by its acronym EITC or EIC. To claim it, you must have earned some money, but not too much. If you fall into the sweet spot for your filing status, the EITC is a great help. And while it does pay more to those with dependent kids, it's also available to child-free folks.
4. Perhaps you had a good year and were able to share some of your success. Fantastic! You know about claiming a tax deduction for cash donations (which also means gifts made by check, credit card or texting), but don't forget other types of deductible charitable giving, such as that jalopy you gave to your church. Some of your volunteer efforts also could be deductible. No, not your time, but purchases you made for your charity, such as the envelopes and stamps to send out the thank-you notes to your fellow donors.
5. Are you a baby boomer with an aging parent like me? We are a big and growing club. And if you contribute to your folks' well-being, you might be able to get some tax breaks for that parental help. In some cases, mom or dad could be your dependent, providing you an extra exemption at filing time. Even if your folks don't qualify as your tax dependents, you still might be able to write off some parental medical expenses that you pay on your own Schedule A.
The point is, don't just take the same tax breaks you claimed year after year. Check to make sure you aren't missing some this filing season that could save you tax dollars.
I hope these and the Weekly Tax Tip collection of often overlooked tax breaks help save you some money this October and perhaps in future tax years.
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