Comments on: Commonly Overlooked Income Tax Deductions

By: The Bear

The Bear — Thu, 25 Jun 2009 13:20:43 +0000

I have to chime in. I have done taxes for many years and I can tell you that many people make very costly mistakes when donating items to charities like Goodwill or the Salvation Army. The mistake I see very often is that on the receipt people will state that they donated “clothes” or “bag of clothes”. It is very important to itemize what you gave, or the IRS would assume that you gave a bag full of old undershirts. For something like that, we would just give an arbiterary $15 deduction if there is no indication as to what kind of clothes were donated. If you itemize your donation like this
- 10 t-shirts
- 5 pairs of jeans
- 12 pairs of shorts
- 3 pairs of dress slacks
- 5 mens dress shirts
- 3 womens dresses

Then it is a lot easier to determine the fair market valaue of what you donated. It also allows you to get a higher deduction. In my this example, all of that could fit into 2 garbage bags. That would be a $30 deduction if you itemized this as 2 bags of clothes. If you itemized as I did, your deduction would be $117. The $117 figure is based on what my local Goodwill says is average fair market value, and it is based on my memory (I am not looking at a cheat sheet). And don’t forget to write-off the mileage driving to and from the donation center.

By: Susan

Susan — Tue, 24 Mar 2009 18:03:26 +0000

Someone once said to me that, payments in-lue of taxes are deductable. i.e. sewer bills paid to the municipality in which you live…any thoughts on that?

By: Chris Holdheide

Chris Holdheide — Fri, 30 Jan 2009 17:56:21 +0000

The $1000 tax deduction for your children is great. I also learned that even if your child was born on Dec. 31st you still get this deduction.

Also I don’t know if this deduction is still around but I you have updated your home and added any new doors, window, insulation, or evern reroofed your home you may get a deduction for that. You may want to ask your CPA about that one as well.

By: atty

atty — Wed, 28 Jan 2009 23:02:43 +0000

State sales taxes are deductible because some states don’t have an income tax. But if you live in a state with both a sales and income tax, then you have to choose which one you want to deduct. In that case, the sales tax deduction is usually only better if you made a large purchase – e.g. car.

By: thomas

thomas — Wed, 28 Jan 2009 05:54:09 +0000

Didn’t remember about dividends – thanks!

By: roy

roy — Wed, 28 Jan 2009 04:16:35 +0000

I”m curious to know if state taxes you are paying through say a chapter 13 bankruptcy would be able to be deducted from 2008 tax return?

By: Dawn

Dawn — Tue, 27 Jan 2009 16:42:52 +0000

I keep all my charitable contribution info now, every little bit helps.

I don’t understand why we would have a deduction for state taxes paid or even state taxes withheld? How is this worded on the tax form?

By: Saver in the City

Saver in the City — Tue, 27 Jan 2009 16:17:40 +0000

Great article… You might want to clarify, though, that job hunting expenses are itemizable deductions if they’re not for your first job or a position in another industry. I had to read that entry a few times to see you were referring to first jobs only…

From Kiplinger’s: As long as you’re searching for a new job in the same line of work, employment and outplacement agency fees are deductible, as are travel expenses if the trip is primarily to look for a new job. It doesn’t matter whether you get that job. Even if you just need to drive across town for a job interview, you can deduct your mileage — 58.5 cents a mile for travel on July 1 or later; 50.5 cents per mile for the first half of 2008. You can also deduct the cost of printing and mailing résumés.

You can’t deduct job-search expenses for your first job or for a job in another line of work.

This write-off is considered a miscellaneous itemized deduction (like employee business expenses and investment-related expenses) and is deductible only if you itemize your deductions on your tax return. Only miscellaneous expenses that exceed 2% of your adjusted gross income are deductible.