Tax Deductions 2010 - Are You Leaving Money on the Table?
Wouldn't it be great if the IRS would do audits to determine whether taxpayers had missed any deductions they were entitled to? Sadly, that's not likely to happen.
Meanwhile, many taxpayers miss important deductions that could save them a substantial amount of money.
It's not uncommon for tax professionals to repeatedly hear, "Really? I can deduct that?On top of that, every tax season there a changes to deductions that a majority of people simply are not aware of.
2010 was a major year for changes to tax deductions.
Not only were there numerous changes to tax deductions in 2010, but by the end of the year some of the earlier changes were changed again.
I can be somewhat daunting for the average person to stay abreast.
Not doing so usually results in paying far more in taxes because eligible deductions were not paid.
While there are too many changes in 2010 tax deductions to cover them all here, a short list of some of the most important changes are touched upon.
One of the most significant changes in IRS deductions applies to the First Time Homebuyer Credit.
There have been changes from the Homebuyer's Credit of 2009.
The 2009 version had to be repaid; the 2010 version of this credit does not, provided you've lived in the house the requisite amount of time to qualify.
The 2010 version of the law also includes a credit available for repeat homebuyers, not just first time homebuyers.
Specific closing documents are required by the IRS for taxpayers to claim this credit.
There are many types of professional expenses that taxpayers may be able to deduct.
Many travel and transportation expenses can be deducted, too.
And, taxpayers in the military may qualify for a variety of special tax deductions.
A number of deductions originally scheduled to expire after 2009 were extended until the end of 2011 making them still applicable in 2010.
These include changes to the Qualified Tuition Expenses, Teacher Classroom Expenses, IRA Distribution to Charity, and State and Local Sales Tax Deductions.
The Alternative Minimum Tax was also changed so that middle class taxpayers are less likely to pay it.
Moving into 2011, the Standard Mileage Rate for deducting up to four automobiles used for business changed, as did the Moving Rate and Medical Travel.
Cell phone record keeping requirements have been revised.
The American Opportunity Credit was extended and energy credits have changed.
While it can be challenging to stay on top of all the changes in tax deductions, it can save taxpayers a significant amount of money if they do so.
Although you may use a professional tax preparer, or rely on a software program to do your taxes, it is still important for taxpayers to have a clear understanding about which tax deductions may apply.
Taking time to be truly informed can make the difference between paying too much to the IRS or keeping more for yourself when claiming all possible deductions.
Meanwhile, many taxpayers miss important deductions that could save them a substantial amount of money.
It's not uncommon for tax professionals to repeatedly hear, "Really? I can deduct that?On top of that, every tax season there a changes to deductions that a majority of people simply are not aware of.
2010 was a major year for changes to tax deductions.
Not only were there numerous changes to tax deductions in 2010, but by the end of the year some of the earlier changes were changed again.
I can be somewhat daunting for the average person to stay abreast.
Not doing so usually results in paying far more in taxes because eligible deductions were not paid.
While there are too many changes in 2010 tax deductions to cover them all here, a short list of some of the most important changes are touched upon.
One of the most significant changes in IRS deductions applies to the First Time Homebuyer Credit.
There have been changes from the Homebuyer's Credit of 2009.
The 2009 version had to be repaid; the 2010 version of this credit does not, provided you've lived in the house the requisite amount of time to qualify.
The 2010 version of the law also includes a credit available for repeat homebuyers, not just first time homebuyers.
Specific closing documents are required by the IRS for taxpayers to claim this credit.
There are many types of professional expenses that taxpayers may be able to deduct.
Many travel and transportation expenses can be deducted, too.
And, taxpayers in the military may qualify for a variety of special tax deductions.
A number of deductions originally scheduled to expire after 2009 were extended until the end of 2011 making them still applicable in 2010.
These include changes to the Qualified Tuition Expenses, Teacher Classroom Expenses, IRA Distribution to Charity, and State and Local Sales Tax Deductions.
The Alternative Minimum Tax was also changed so that middle class taxpayers are less likely to pay it.
Moving into 2011, the Standard Mileage Rate for deducting up to four automobiles used for business changed, as did the Moving Rate and Medical Travel.
Cell phone record keeping requirements have been revised.
The American Opportunity Credit was extended and energy credits have changed.
While it can be challenging to stay on top of all the changes in tax deductions, it can save taxpayers a significant amount of money if they do so.
Although you may use a professional tax preparer, or rely on a software program to do your taxes, it is still important for taxpayers to have a clear understanding about which tax deductions may apply.
Taking time to be truly informed can make the difference between paying too much to the IRS or keeping more for yourself when claiming all possible deductions.
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