Hidden Tax Deductible Items
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by: ZachAllred
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For 18 years I have been preparing income tax returns for individuals. Unfortunately even as a tax preparer I miss deductions on my client's tax returns but for those who prepare their own returns I am certain these 10 tax deductible items are almost always overlooked.
1. Miles driven for medical related incidences are deductible as an itemized deduction. The rate is $.20 for 2007 and $.19 for 2008. Miles are totaled for doctor visits and hospital visits. Start adding them up and you will be amazed. Think about it on a weekly or monthly basis and then multiply by 52 or 12 respectively.
2. Mortgage interest paid on a 2nd mortgage is often overlooked. If you have a motor home with a functioning kitchen and bathroom you are entitled to this often over looked tax deductible item.
3. Deducting charitable donations may be undesired by some because of the biblical adage "Do not let your right hand know what your left hand is doing." However I tell my clients that the government rewards us for being benevolent so add up you contributions. Include donations to Deseret Industries as well as vehicles donated to various foundations.
4. Expenses incurred during a move that is job related are a tax deductible item. Ask your tax preparer about this one as there are certain tests to be satisfied. If you qualify include expenses for transportation and storage of household goods. Also travel including lodging from your old home to your new home is deductible.
5. Deducting alimony can provide an annual tax reduction of $3,360 per year assuming $1,000 paid per month and you are in a 28% tax bracket. Do not pass this one up as the alimony is also taxable to your ex.
6. Interest for loans to pay education expense are a deduction. With graduation comes so many changes and mail gets lost and misplaced or just does not get forwarded. Take advantage of this deduction by being sure you know how much interest was actually paid for the year.
7. Most of us know that we can deduct our real estate taxes on our home but did you also know the state income taxes withheld from your W-2 are also deductible. Also the state income taxes paid during the year for a prior year should be included as a deduction.
8. You can create a capital loss on your individual tax return by deducting worthless debts. These are loans you have made to family and friends that have not been repaid. Capital losses go nicely against capital gains
9. Losses from business endeavors will be covered in other articles but for the present let me just say do not be timid to take losses on line 12 of your 1040 which arise from self employment. If your venture was intended to turn a profit then you should be taking the deduction.
10. Rental income from a family member is usually unreported because we want to beat the system. First this is illegal but second you are missing out on a very large tax deductible item.
About the Author
You can go to Zach Allred's web site for more articles relating to tax deductible items and tax structuring in addition to several home based business ideas. Get a totally unique version of this article from our article submission service
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