Any time you get in a hurry to finish your tax return, be it in April or as the October filing extension deadline nears, you run the risk of missing out on some tax breaks.
To prevent that from happening, here are 10 tax breaks, both credits and deductions, that are often overlooked. Make sure you don’t miss them if they apply to your tax situation.
1. Child care costs
You kept track of the after school care for your kids while you were at work. What about this summer? Did you send the kiddos to day camp? That cost also can count toward claiming the dependent care credit.
2. Mortgage refinancing loan points
Did the historically low home loan rates prompt you to refinance? Make sure you count any refi points you paid. Just remember that you’ll likely have to spread this deduction out over the life of the loan, but every little tax break helps.
3. Medical expenses
You have to itemize to deduct medical and dental costs. And you have to have more than 7.5 percent of your adjusted gross income. That’s why you need to pay attention to every possible medical deduction so you can get over that threshold. Check out these expenses that can help you claim this deduction.
4. Home energy improvement costs
If you made your home more energy efficient in 2010 make sure you claim those costs on the return you send in by Oct. 17. That tax year’s energy efficient upgrade credit is much more beneficial than the 2011 version.
5. Moving expenses
Did you relocate to take a job? Congratulations on the new position and let the IRS help by giving you a break for your moving costs.
6. Job hunting costs
If you spent money finding the job for which you moved, you also might be able to write off those expenses. You have to itemize and the job search and other miscellaneous costs must be more than 2 percent of your adjusted gross income. But run the numbers just in case so you don’t waste this tax break if you did meet the deduction threshold.
7. Cell phone business expenses
If you used a cell phone for work, the IRS has made it easier to deduct this cost. And these costs can help you get past that 2 percent miscellaneous itemized deduction hurdle.
8. Military reservist training trips
Members of the military reserve forces and National Guard who travel more than 100 miles and stay overnight for training exercises can deduct their travel expenses, including lodging and half the cost of meals. And don’t forget to track your mileage if you drive. You can write that off, too.
9. Caring for a dependent parent
A lot of Baby Boomers find themselves parenting their parents. If you’re providing financial as well as emotional support, you might be able to write off mom or dad as a dependent on your return.
10. Earned Income Tax Credit
This tax credit, often referred to as the EITC or EIC, is for folks who worked but didn’t make a lot of money. With this bad economy, more people who only worked part of the tax year or took a lower paying job might be eligible for the EITC. It pays more to taxpayers with children, but childless folks who meet the requirements also can get some money back from the IRS.
If you’re finishing up your 2010 tax return, check these out. If you qualify, they could help cut your final tax bill.
And if you’re already done with last year’s taxes, great! But hang onto this list for your 2011 tax return filing next year.
Final tax-filing tips: Did you miss any of the previously posted last-minute filing tips? Not to worry. You can find them at the special Countdown to Oct. 17, 2011, blog page.
You also might find these items of interest:
- Overlooked tax deductions and credits
- 10 overlooked tax breaks (via Bankrate.com)
