Ten Tax Deductions to Consider

Posted on 03/12/2010

You work hard for your money, so you'd better take advantage of as many tax deductions as possible. There are lots of deductions that taxpayers forget about or aren’t aware of which means they could be missing out on money they deserve. Here are ten tax deductions you may want to consider, but don't forget to check the UltimateCoupons' Tax Coupons page for deals on doing your taxes!

Mortgage Interest - Are you homeowner? One big deduction to consider is mortgage interest. That large chunk of money you pay towards interest on your home loan is deductible on your taxes.

Medical Expenses - Getting sick can be expensive. If you spent more than 7.5% of your adjusted gross income on medical expenses, you can deduct that. This includes dental expenses, insurance premiums and any out of pocket costs your insurance doesn’t cover.

Higher Education - Did you take classes? You may be able to write off education expenses. Under the American Opportunity Credit you can earn as much as $2500 per student for qualified taxpayers.

Energy Savings Home Improvement - Did you add insulation, new windows or a high-efficiency furnace to your home? Any improvements you made that increase your home’s energy efficiency can help you qualify for up to $1500 in tax credits.

Charitable Contributions - Whether your donation was in cash or clothing, you can still write it off. The important thing to remember is to get a receipt. If you get audited, only the donations with receipts will be accepted.

State Tax - If you owed money on your state taxes last year, you can write that expense off on this year’s taxes. Make sure you also include the state tax that was withheld from your paycheck.

New Vehicle Sales Tax - That new car, truck, motorcycle or motor home sitting in your driveway may get you a deduction. If you bought it between February 16, 2009 and the end of the year you may qualify for a tax deduction. You can deduct the sales tax you paid on your purchase.

Payment Fees - If you did work and accepted payment through PayPal or by credit card, you can deduct the processing fees associated with those services.

Moving Expenses - Relocating because of a job may mean you’re eligible to deduct moving expenses. These could include renting a moving truck, filling up your tank or buying boxes to pack up all of your stuff. The new job must be more than 50 miles away for you to qualify.

Exchange Students, Foster Care or Adoption - If you hosted an exchange student, you may be eligible for a $50 tax deduction for each month they stayed with you. If you cared for foster children you may also be able to write off expenses associated with that. And under qualifying situations adoption credits are available that reduce your tax liability by up to $11,650.

By Alison Storm

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