Comments on: Twelve Commonly Missed Income Tax Deductions

By: Lindsay

Lindsay — Sat, 04 Jul 2009 10:22:02 +0000

by the way…i also pay rent to my parents, and have a new car i bought in 2008. plus can i deduct anything i buy for my son by any chance? i just dont know how everything works and if u could please find someone to help me with a list of things i can use to get money back at the end of the year in a way i can understand….it would greatly be appreciated!!!

By: Lindsay

Lindsay — Sat, 04 Jul 2009 10:18:35 +0000

ok, i am really dumb when it comes to this stuff.i dont even understand the terms you use! i am a single parent and went to school last year and paid the full amount. i know u can get deduction? i think if i donate clothes and things to the good-will or places like that and for childcare. could u please help my understand in understandable words=) what all i can use to deduct and get more money back ect.thank you so much!

By: brett

brett — Wed, 06 May 2009 03:49:29 +0000

sweet. so useful on my math project!!!!!!!!

By: Sam

Sam — Wed, 15 Apr 2009 20:19:41 +0000

I calculated the sales tax deduction last year: added receipts just for a remodel I did. The deduction was triple what the table allowed. This year I added the tax from the few receipts I saved, on credit card bills, and on utility bills (the sales tax I pay on utility bills alone is nearly half the amount from the tax table). Again, this amount was triple that on the tax table.

By: Bill

Bill — Tue, 07 Apr 2009 06:15:55 +0000

Generally, rent is not deductible, at least on the Federal return. But I can think of at least a couple of special instances where you might get a partial deduction.

One is if you had a business operating out of your apartment or a business which allowed you to claim a home office. If you were making a profit, you could take a deduction for this, which would include at least a part of your rent. This would be a business expense and would be claimed on the Schedule C.

The second is if you have a job which entails the use of a home office. In this case, you would claim the deduction on Form 2106 which would only benefit you if you itemized on Schedule A and if the expenses claimed exceeded 2% of your adjusted gross income.

Realize that the home office deduction is one that is abused by many taxpayers and is one of the first things the IRS will look at in an audit. It may even flag your return for an audit. That said, if you are entitled to it and can support it, you should claim the deduction.

By: Kathy

Kathy — Tue, 07 Apr 2009 03:52:17 +0000

Does anyone know if you can claim a deduction for paying rent if you don’t own a home? I am trying to help my daughter figure this out, she rents an apartment — I own a home and am not sure. Thanks!

By: Gary

Gary — Sun, 08 Mar 2009 23:48:40 +0000

Last year i had to pay on my federal income tax because of improper witholding. Can i claim that as a deduction this year?

By: Jackie

Jackie — Wed, 18 Feb 2009 01:48:40 +0000

sold property, received money from transaction paid taxes on it already the yr we obtained it. Put it in a New York Life anuity. 3 yrs. later needed money for several hospital stays ,operations, bills, home improvements. each time we withdrawal money we get penalized on money we withdrawal ,we have already paid the taxes on when we recieved it.
Will the money that we withdrawaled have to be claimed as income.. Please say NO!!
Jackie

By: Carol

Carol — Tue, 17 Feb 2009 17:11:34 +0000

I am retired with pension plus social security. I am raising 3 grandchildren with legal custody. Last year I filed easy filing and got a $ 630.30 refund. I brought a house in January 08 and a car in July of 08. Because of these purchases I filed the long form and was told I will only get back $23.00. How come. This is the same accountant that I’ve use for the past six years.

By: Kyle

Kyle — Mon, 09 Feb 2009 21:16:29 +0000

In 2007, I subcontracted building my own house. I was able to deduct 9% on $150,000 of material cost.

By: rose

rose — Fri, 06 Feb 2009 20:13:37 +0000

there is a calculator for sales tax (it is on the irs website, I’m pretty sure.) You input the state you live in, if you’ve moved, when you moved, any extra sales tax(ie car purchase) and it gives you the sales tax number.

By: nickel

nickel — Wed, 28 Jan 2009 23:08:00 +0000

atty: I wouldn’t want to be in your shoes in the event of an audit. While I agree that your approach is defensible in a common sense sort of way, I’d be willing to bet that the IRS would want documentation. The good news (as noted above) is that you can combine the tabled value with certain major purchases, which gives you the best of both worlds (we’ve done this in the past).

By: atty

atty — Wed, 28 Jan 2009 22:59:30 +0000

I’ve taken the state sales deduction on an actual basis. As nickel noted, if you live in a state with income tax, it generally only makes sense if you bought a car, remodeled, etc.

The way I did it was as follows: I took my total credit card bills (we put most everything on the cards) and used an average tax rate (I think 7.25% in my case). Then I made an estimate for cash – though in hindsight, ATM withdrawals would have been a better proxy than a finger in the air. After all – if you took the cash out, and you don’t have it now, then you spent it!

I think this is a reasonable approximation and is defensible. Without a major purchase, it probably won’t be worth it.

By: sandra uren

sandra uren — Tue, 30 Dec 2008 22:00:17 +0000

I did not know that we could claim any broker fee’s on our income tax. Could I go back to 2005 and beable to claim those on my 2008 income tax.

By: kurt

kurt — Mon, 03 Mar 2008 15:22:07 +0000

“Old points on refinancing. All unamortized mortgage points left over prior years are deducted all at once if you end up refinancing your mortgage in any particular year.”
I would imagine it isn’t just refinancing the mortgage, but paying it off as well? Small difference, but worth noting, I’d imagine.

By: EmilyStarbuck

EmilyStarbuck — Wed, 06 Feb 2008 22:50:47 +0000

That’s a really helpful list you’ve put together — I doubt most people would take the time to find out that they’re eligible for so many deductions.

By: CD Rates Blog

CD Rates Blog — Wed, 06 Feb 2008 21:45:47 +0000

Great list. For the person looking for Tax Credits, think Children. Although, you will come out ahead in Taxes, your actual
expenses will be way higher. :O)

By: Rhei, writer Surefirewealth.com

Rhei, writer Surefirewealth.com — Mon, 04 Feb 2008 10:42:18 +0000

Good point! Now, you gave me an idea to compute my tax refund. I’m not that long in this company, but that will be good because they cannot fool me with my taxes. I can complain to them the moment I found out that they’re fooling me. Thanks!

By: Pamela

Pamela — Mon, 04 Feb 2008 03:03:12 +0000

Brandon, I had a very similar experience to you – our tax due was sitting at roughly $1500. I knew I could deduct tuition and fees, but I was under the impression I could only use money we actually paid to the school and not loans we used to pay school, but I was wrong – loans can be included in the “money used to pay for school” total. We’re now sitting at a refund of over $400 (though I don’t know if we’ll actually get a refund as I remember reading something somewhere that said if the education-related credits/deductions is greater than the tax you owe, you will not receive the difference as a refund – either way, I’m happy we don’t have to pay the $1500). The IRS site had a relatively easy-to-understand info page about education-related deductions/credits.

By: Matt

Matt — Sat, 02 Feb 2008 01:22:08 +0000

Thanks I didn’t know about the retirement tax credit and I’m sure that my AGI will be under $25,000. I dont know how much I contributed to my IRA in 2007, yet. But I don’t think that it was $2000, maybe $1200. Could I file my taxes, get the refund, contribute the remaining I need to reach $2000 for 2007 then refile with the adjusted amount?

Would this even be worth it?

By: Brandon

Brandon — Wed, 30 Jan 2008 22:17:59 +0000

OMG, I want to dance in the street (too bad it is rush hour!). I had did an estimated outlook of my taxes and was going to owe nearly $2000. The only deduction/credit that I had yet to add into the mix was the stuff from our college. Anyway, I ended up getting over $1900 in the Lifetime Learning Credit, and the deductions knocked out the rest putting us into a $265 refund. There will probably be some other deductions, but I can sleep peacefully knowing I don’t have to come up with that much for taxes.

By: nickel

nickel — Wed, 30 Jan 2008 18:20:00 +0000

The closest I’ve come to calculating the state sales tax has been to take the tabled value and then add on sales tax associated with the purchase of a car (you’re allowed to add on certain large transactions even if you use the estimated value from the sales tax table).

By: ChristianPF

ChristianPF — Wed, 30 Jan 2008 18:13:33 +0000

I would love to hear from anyone who has taken the STATE SALES TAX deduction by calculating it, rather than taking the standard deduction… I have always been curious to see if it would work out in my favor, but have been unwilling to invest the time…

By: Brandon

Brandon — Wed, 30 Jan 2008 14:02:28 +0000

Thanks! You saved me $135 already. My tax program had the retirement tax credit available, but for whatever reason it did not present it to me by default.

By: nickel

nickel — Wed, 30 Jan 2008 13:38:26 +0000

Ron: You are correct. I noted the Hope and Lifetime Learning credits under the section on higher education expenses, though I didn’t provide any details.

By: Ron@TheWisdomJournal

Ron@TheWisdomJournal — Wed, 30 Jan 2008 13:33:48 +0000

I don’t remember the amount, but if you make below a certain level, I think you can take some of your education expenses as a CREDIT. As you know, credits are much better than deductions!