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.
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. Interest paid on a 2nd mortgage is deductible as long as
the residence has a function kitchen and bathroom. Have you ever considered your motor home in this
hidden tax deductible item?
3. Charitable donations are often overlooked since we do
this out of the kindness of our hearts. But when it comes tax time sit down and figure these up.
Include donations to Deseret Industries and vehicles donated to different foundations.
4. Moving expenses incurred for a job related move are a tax deductible item. There are certain
tests to qualify for this deduction so be sure to consult your tax advisor. Deductions include
transportation and storage of household goods. 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. Student loan interest paid on
loans for education is deductible. People often miss this one because a lot of changes take place
after graduation and this deduction gets over looked. With rising education costs the student loan
interest really adds up.
7. Taxes withheld from your paycheck that have been sent on
to your state on your behalf by your employer are deductible. Also if you owed your state for taxes
from the year before that you paid during the current tax year do not forget this tax deductible
8. Loans made to family and friends who have failed to repay you are deductible
as worthless debts on Schedule D. You are limited to $3,000 per year until the full loss is taken.
But if you have capital gains then the whole loss can be taken up to the amount of the capital gain
9. If you are self employed there are countless deductions but for the
purpose of this article do not be afraid to take a loss on line 12 of your 1040 resulting from your
Schedule C. If I did not make any income from my self employed venture can I take a loss? Yes
10. When a family member moves into another home you own often you will
forget to report it. The incentive to reporting is that this is a tax deductible item. You can
usually create a loss to be reported on your 1040 when these deductions are properly accounted