Serving Southwest Florida (SWFL)

2009 Most-Overlooked Income Tax Deductions

Below are some new deductions/credits for the 2009 tax season and also some deductions that often get overlooked.

via K & M Accounting

5. Out-of-Pocket Charitable Contributions
It’s hard to overlook the big charitable gifts you made during the year, by check or payroll deduction. But the little things add up, too, and you can write off out-of-pocket costs incurred while doing good works. If you drove your car for charity in 2009, remember to deduct 14 cents per mile

4. Child Care Credit
A credit is so much better than a deduction; it reduces your tax bill dollar for dollar. If you pay your child-care bills through a reimbursement account at work, it’s easy to overlook the child-care credit.

3. Hope Credit for College Juniors and Seniors
Parents of college kids know the $2,000 Hope Credit is just for the first two years of college; after that, the lower Lifetime Learning Credit applies. But Wait! In 2009, the credit has been renamed, increased and expanded. It’s now called the American Opportunity Credit, and it will rebate up to $2,500 for each qualifying student for the first four years of college.

2. Refinancing Points
When you buy a house, you get to deduct in one fell swoop the points paid to get your mortgage. When you refinance a mortgage, though, you have to deduct the points over the life of the loan, that means you can deduct 1/30th of the points a year if it’s a 30-year mortgage.

1. Making Work Pay Credit
You’ve probably been enjoying the fruits of this credit via reduced payroll tax withholding since spring 2009. But to lock in your savings-by reducing your tax bill by $400 if you’re single or $800 if you’re married and file a joint return, you’ll use brand-new Schedule M to do so.