The U.S. tax code is written to hide many tax deductions you might qualify for. Without realizing it, millions in the U.S. overpay taxes because they unwittingly overlook tax write-offs. It doesn’t take an accounting degree to find several tax deductions that may otherwise go unused.
Government losses from tax deductions
The government gets about $1 trillion less tax dollars yearly because of the 46 million U.S. taxpayers that itemize their tax deductions instead of taking the standard deduction. About 85 million working class individuals use standard write-offs to protect another $700 billion. Choosing the standard tax deduction means many individuals are missing out on free cash. Several could pay fewer taxes annually if they were to itemize. Even those who take advantage of tax write-offs for instance interest paid on mortgages and student loans, real estate property taxes and state sales taxes could possibly be giving the government additional money.
Job expenditures in tax deductions
Many people do not realize there’s a tax break for any expenditures caused when looking for a job. The United States job market has been terrible lately meaning many individuals are missing this tax break. For job hunters with total itemized write-offs greater than 2 percent of adjusted gross income, job hunting expenditures can be deducted. This is only allowed if the job search is in the same industry as the previous job. Job hunting expenditures can't be deducted when it is for a first time job. However, any moving expenses, including 14.5 cents per mile, could be deducted as long as the person is moving over 50 miles for the job. For taxpayers going back to school to change careers, $2,500 of college tuition can be claimed as a tax credit. When getting a tax deduction, the amount of taxable income goes down. A tax credit lowers the amount paid in taxes. Single taxpayers making $80,000 or less or married couples making $160,000 or less is eligible for the tu! ition tax credit.
More write-offs not to forget
Working class individuals often overlook tax write-offs related to home and family. As more Americans take care of their elderly parents, they become eligible for a substantial tax deduction. A dependent parent deduction is given to everyone that provides over half of the financial support to their parents while paying more than 7.5 percent of adjusted gross income on this person. There have been lots of United States automaker incentives for purchasing a new automobile. In 2010, purchasing a new automobile means you can deduct the sales tax, even if you are not doing an itemized deduction, as long as you made under $135,000. Green energy tax credits worth up to $1,500 are available for working class individuals who invested in energy-efficient home improvements. There was also another tax credit not to forget. This was the Making Work Pay tax credit. The 2010 tax year is the last chance to take advantage of the Making Work Pay tax credit. You will find some employers t! hat take care of this tax credit for employees. Nevertheless, a single person can take $400 off the bill and a married couple can take off $800 if they turn in their 1040 form with a Schedule M.
Articles cited
MSN Money
articles.moneycentral.msn.com/Taxes/CutYourTaxes/the-19-most-overlooked-tax-deductions.aspx?page=2
U.S. News and World Report
news.yahoo.com/s/usnews/20110217/ts_usnews/10hiddentaxdeductionsexposed
ABC News
abcnews.go.com/Business/irs-taxes-2010-tax-credits-deductions-save-money/story?id=12908788&page=2
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