Wednesday, November 12, 2008

5 Overlooked Tax Deductions

Every year millions of tax retuns are filed, most of them will overlook legitimate tax deductions creating an unnecessary tax burden. The following is a list of 5 often overlooked deductions:

  1. Moving Expenses.

  2. Accounting Fees for tax preparation services and IRS audits.

  3. Medical and Dental Expenses.

  4. Taxes Paid.

  5. Charitable Contributions.

Moving Expenses: Moving expenses are deductible if certain qualifications are met by the taxpayer. The move has to be work related (transfer, new job, etc...) The taxpayer must start to work within 1 year from the date he/she moved to the new location. Your new home must be closer to your place of work than your old home. Finally, your new job location must be at least 50 miles farther from your from your old home.

Accounting Fees for Tax Preparation Services: A taxpayer is allowed to deduct the cost of tax preparation services for the year that the fees were paid, including all schedules (A, C, E, etc...)

Medical and Dental Expenses: These expenses incurred by taxpayers is deductible if the cost is more than 7.5% of the adjusted gross income. Deductible medical expenses include but is not limited to: Prescribed birth control pills, non-cosmetic eye surgery, contact lenses, hearing aids and certain weight-loss treatment or interventions for the obese.

Taxes Paid: State and local income taxes paid, real estate, foreign real estate and occupational, among others.

Charitable Contributions: Most charitable contributions are tax deductible. Among them are contributions to churches and religious organizations, non-profit schools, war veteran's organizations, Salvation Army, Red Cross and most non-profit organizations.

The of allowed tax deductions is not limited to this list and many restrictions apply. As always, it is best to consult with a competent accountant or tax consultant about these and other liabilities to make sure that the amount deducted on each tax return is maximized.

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