Tax Time Is Here!! Here Are a Few Deductions & Tax Credits Often Overlooked!!

A tax credit actually reduces your taxes, dollar for dollar, but a tax deduction just decreases your taxable income. It's easy to understand how someone could miss a tax deduction with the hundreds of conditions to be mulled through when trying to figure what you are entitled to.

For Starters one often missed item is, if you were among the approximately 10 percent of Americans who were jobless last year, you may have a tax deduction coming. Job hunting expenses can be deducted, provided your total miscellaneous itemized deductions are greater than 2 percent of your adjusted gross income. Such expenses could include the cost of printing resumes, food and cab fares. But the catch is that you must be looking for a job in the same field as when you last worked. If you move at least 50 miles, your moving costs can be deducted if associated with job placement. Expenses such as highway tolls and parking are included, and you may even claim 16 ½ cents per mile deduction.

The American Opportunity Tax credit allows for $2,500 of college tuition to be claimed as a credit. It covers all four years of school and the full credit may be claimed by single people who earn $80,000 or less, or by married couples who earn $160,000 or less.

If you make a contribution to a retirement account -- such as an IRA or a 401(k) -- you could be eligible for up to $1,000 in credit if you're single, and up to $2,000 for married couples. To qualify, single filers must make less than $27,750 and married couples, under $55,500. If you're going to claim this credit, you must be over 18, not a full-time student and cannot be claimed as a dependent by anyone else. The actual credit is based on your filing status, how much you contribute to your retirement account and how much you make. The more you contribute, the less you earn and the higher your credit will be. To claim this credit, you must complete Form 8880 – also known as the Credit for Qualified Retirement Savings Contributions. You can get the form, and instructions for calculating how large your credit will be from the IRS website.

Charitable donations also are often overlooked. Although you can deduct the value of items you donate to charity, you cannot deduct the value of any time or labor you may have given to a charity's project. You can also deduct 14 cents a mile for any driving you may have done for charitable work.

If you compile your own taxes annually it is a good idea to go to the IRS website which offers quite a bit of information on personal deductions and tax credit options you may qualify for. If with all the changes that have occured in the past few years you are unsure of any proceedures it is advisable to utilize a tax preparer that is a professional in this field to ensure you get your maximum return. Hopefully this Information has been helpful to my patrons and prompts you to look into your possibilities when filing your taxes.