Uncle Sam Wants YOU … To File Your Taxes

Get your receipts lined up. Rip open the W-2s. Sharpen those pencils and make sure you have plenty of erasers. It’s tax time, the season for crunching numbers and squeezing blood from a turnip. It’s a chore not many of us relish unless we expect a big return (and if you do, for shame, you’re giving the government an interest-free loan, but more about that at another time).

It’s not that we don’t receive breaks from Uncle Sam. Last year, nearly 46 million citizens itemized their taxes via the 1040 form and claimed nearly $1 trillion in deductions. Those using standard deductions claimed half a trillion dollars. Yet when you take us as individuals, who doesn’t want to pay as few taxes as possible, whether it involves getting a bigger return or owing less?

As far as deductions are concerned, we all know the U.S. tax system is a living organism that evolves from year to year, that’s why it’s important to stay on top of any changes; you want to receive all the tax breaks you’re entitled to. With that in mind, let’s review a few deductions/credits you might be overlooking.

• Out-of-pocket charitable contributions. Some of our charitable donations are more memorable than others. Maybe you give to the United Way through payroll deduction at work (check your December pay stub for annual totals). Don’t forget the smaller things. Remember the stamps you bought for the school’s fundraising efforts? Charitable contribution. The ingredients for the meal you made for the soup kitchen? Charitable contribution. Click here for more information.
  
  
• Moving expenses. You took that dream job out of town and the good things keep right on coming with tax deductions! If you moved more than 50 miles, you’re able to deduct the cost of getting you and your stuff to the new location. That includes 24 cents per mile for driving your own vehicle (plus any parking, tolls, etc.) For additional moving info, click here.
  
  
• Childcare credit. There’s good news on this front; a tax credit is even better than a deduction because it reduces your tax bill dollar for dollar. Nice, eh? If you spend more than allowed by your employer’s tax-favored reimbursement account ($5,000 for one child/$6,000 for two or more), you can claim credit on up to $1,000 for additional expenses.
   
• Home energy-saving credit. This credit has increased to 30% for 2009-2010 (from 10%). It goes to a maximum of $1,500 for the two-year period.
   
• Homebuyer credit. This credit changed during the course of the year to include not only first-time buyers, but longtime homeowners as well. You could be credited up to $8,000. For all the details, click here.
  
  
• New vehicle sales tax deduction. If you bought a new car, truck, motorcycle or motor home after February 16, 2009, and before the end of the year, you’re able to deduct the sales tax paid, up to a maximum vehicle price of $49,500, as an itemized deduction. If you claim the standard deduction, it goes as a supercharged standard deduction.

Please note, this article just touches on some of this year’s crop of deductions. The U.S. tax code can be a maze of twisting, confusing government-speak, so it is highly advisable that you consult a tax professional to be sure you understand and receive all your eligible deductions/credits.

If your taxes are relatively easy, you can do them for free as a Vantage member with the TurboTax Federal Free Edition. Or get a 10% discount with TurboTax Online Deluxe. Just click here for additional information, or to get started.