|
|
Like this article? PLEASE +1 it! |
|
Even More Commonly Missed Deductions!
Written by: Bob O'BrienArticle Overview: VETERAN FINANCIAL PLANNER GIVES YOU TIPS ON PREPARING YOUR TAXES AND GOING OVER MORE COMMON MISSED TAX DEDUCTIONS.
![]() |
Free Download - Earn DAILY Interest While in this Currency Investment! By Bob O'Brien |
Even More Commonly Missed Deductions!
Missing just one or two deductions can cost you a couple of hundred bucks in some cases, and even people that are pretty well organized, and know the tax system pretty well still miss a couple of deductions every year.
I can’t encourage you enough to download the Schedule A, and look at three years of tax returns while we go through these deductions. Make certain that you work off that in order to be certain you are getting all your deductions.
It is so important that you are comfortable with your 1040 and Schedules A-B if you are serious about understanding taxes better and maximizing your return!
Remember your 1040 is the tree trunk for the entire return and everything else are branches. Some braches are more important to some than others.
Other important schedules will depend on your business activities. If you are a small business owner (Schedule C), investor (Schedule D), real estate investor(Schedule E) and farmer (Schedule F).
A good deduction to remember and I hope you never have is: Casualty and Theft Losses, in which there is a 10% floor. Casualty means anything unexpected like a fire while theft is pretty self explanatory.
I had a client that had a fire in her home who saved a lot of money in taxes because of this deduction. I don’t want to bore you with all the rules because you can just ask me in our online course how this deduction works and I would be more than happy to explain.
I do however want to make certain that you are aware of the Job Expenses and certain Miscellaneous Deductions. This is an area that is chocked full of deductions. I have included a link for the Miscellaneous Itemized Deductions, which covers, line 21-28.
http://www.irs.gov/publications/p529/index.html
There is a 2% floor for many of these deductions. What this means is that if you have $100k in income, then you need $2,000 in these deductions in order to start increasing your refund! If you had $50k in income, you would need $1k in these deductions in order to start getting money back. Just look at line 26 of the Schedule where it asks to multiply 2% times your AGI.
You can deduct only unreimbursed employee expenses which are:
• Paid or incurred during your tax year,
• For carrying on your trade or business of being an employee, and
• Ordinary and necessary.
There is a whole list so make certain you are familiar with it. You can print out this version of the same publication (529) and use at as a checklist. Just to mention a few: depreciation on computers or cell phones, subscriptions to professional journals and trade magazines related to your work. Make certain you go through the list in order to maximize your return, there are a lot of them
Other miscellaneous expenses subject to the 2% floor are things like tax preparation fees. These fees can include computer programs, periodicals and e-filing. Our course is also tax deductible since you are using it for assistance with your taxes.
Had to cash out your entire IRA this year? Don’t forget this deduction!
Also, please note that all the investment related expenses that are deductible such as: fees and losses from Roth IRAs and Traditional IRAs when you draw out the entire account. (I bet there are a lot of people that miss that this year!)
Schedule A line 28 and miscellaneous expenses are not subject to the 2% floor. A lot of people out there seem to think that gambling losses are subject to the 2% floor and it is not. If you enjoy gaming, make certain you read this section of the link that I included and that you are doing your best to keep good records in case you are ever questioned.
Finally, just note the last section of Schedule A line 29 and the fact that you can get phased out and have a reduction in the deductions on Schedule A if your income exceeds $159,950.
I have no idea why you would want to itemize if your itemized deduction did not exceed your standard deduction. (The last line of Schedule A, line 30) The standard deduction for 2008 for a single filer is $5.450 and married filing jointly is $10,900. If your deductions did not meet these amounts and they were higher, then take the standard deduction but make certain that you are familiar with the “above the line” deductions, because you can still take advantage of them.
Sincerely,
Bob O’Brien
Sr. Instructor
Article Tags: braches, business activities, casualty, job, miscellaneous itemized deductions, money, real estate investor, schedule c, small business owner, tax returns, theft losses, tree trunk, what this means, www irs gov
Referred by: http://www.mywealth.com
|
About the Author: Bob O'Brien RSS for Bob's articles - Visit Bob's website Bob O'Brien has over 14 years experience as a financial planner, tax advisor and investor. He became interested in finance at an early age and has been a financial planner and tax advisor for firms like Ernst and Young and TIAA-CREF. Bob is very much open to all investment approaches and making certain that all the people he helps are taking a planning approach in addition to achieving high rates of returns. Click here to visit Bob's website Be Open Minded to Market Timing Should you Start a Business in 2009 Earn DAILY Interest While in this Currency Investment Heres why Buy Hold Investing is Dead Ponzi Schemes and Steroids These are the Days of our Lives |
Related Forum Posts
Share this article with your friends. Fund someone's dream.
Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.
Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!
Improve E-mail: Avoid the Quicksand
Common Sense Stress Management
Make Small Commitments. Get Big Changes.
Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.



