Don't Overlook these Deductions if you Itemize!
Feb 14 '00 (Updated Oct 07 '00)
So, you're going to itemize? Well then make sure you get everything you're entitled to. This is a good idea list and does not contain all the fine print which may be necessary when dealing with the IRS. In order to protect yourself, you should consult a tax specialist, or a good tax program, when filling out your 1040.
With the exception of Gambling Losses and Charitable Contributions, the deductions in these categories must exceed 2% of your Adjusted Gross Income in order for you to use them. The following is a list of the most often overlooked deductions for Itemizers:
- Job Hunting Expenses: -
Even if you are unsuccessful in your quest, as long as your job search was in your current field of employment, you may be have some good fodder for deductions here. Career changers need not apply.
• Resume costs (printing, mailing, paper, ink)
• Advertising
• Career Counseling
• Employment Agency
• Telephone (how about all those long distance calls to potential employers?)
• Interviews (transportation to and from)
• Travel (as long as your trip was for the purpose of obtaining employment in your current field, we're looking at meals, lodging, transportation, etc.)
- Gambling Losses -
So you gave up on the job search and went to Vegas instead? Well, I know overall you came out even, but just in case, you can deduct any losses up to the amount of gambling winnings that you report on your 1040. Make sure you keep a log of the following as back up proof of losses:
• Type of Gambling
• Location of Gambling
• Date of Loss
• Amount of Loss
• Receipts showing your trip
- Job Related Expenses -
OK, back to business. After that trip, you need to start making some money! You can deduct only those expenses for which you have not been reimbursed by your employer. I know how you think. ;) Make sure you have the receipts to substantiate these deductions:
• Travel and Meals
• Supplies
• Publications
• Dues
• Uniforms and Work Clothes (includes cleaning)
• Entertainment (this is only 50% deductible)
- Job Related Educational Expenses -
If you have educational expenses that relate to directly maintaining or improving your skill in your current realm of employment; or if your employer, or a law, has required that you complete this education in order to maintain your current position and salary, you may be able to deduct it. However, if any of the following conditions exist, you MAY NOT deduct this expense:
• Education for the purpose of obtaining a new job or trade is not acceptable.
• Education for the purpose of returning to a job or profession is not acceptable
• Education for the purpose of meeting the qualifications for a new job or trade is not acceptable.
- Investment Expenses -
Be careful in this area. You cannot deduct broker's commissions or fees. Those fees will be added to the initial cost of the investment, so you'll benefit from them when you sell. You cannot deduct the cost of attending seminars or conventions (I know you were thinking of that one in Maui, right?)
• Tax preparation and advice fees
• Safe deposit box rentals and fees
• Investment and tax related books and magazines
• Investment advice fees
- Charitable Contributions -
If you are kind enough to give, the IRS will reciprocate with financial benefits for your benevolence. Make sure you keep receipts and detailed records. You CANNOT deduct the value of your time or expertise.
• Postage & Office Supplies relating to your charity work
• Uniforms & Miscellaneous Expenses (do you participate in the Boy or Girl Scouts?)
• Travel on behalf of charity: as long as your trip was not for personal pleasure or a vacation. Make sure you track lodging, meals, and transportation. This can include airfare and car rental.
- Need More Info? -
• The IRS maintains a help line where you can ask questions:
IRS Federal Tax Information and Assistance Line: 800.829.1040
If your questions are, um, kinda out there on a limb, you may want to dial *67 first! ;)
• Here's a link to all the tax forms and instructions you could ever want!:
http://www.irs.ustreas.gov/prod/forms_pubs/index.html
Please note that I am not a tax attorney or an accountant. You should thoroughly read the instruction booklets with your 1040, as well as any additional forms that are applicable, and make sure you follow the directions, or seek professional help :)
You gotta love tax season!
Here are some related reviews that may be of interest:
• Don't Play Audit Roulette: Tips to Avoid the Triggers
http://creditexpert.epinions.com/finc-review-2898-A2E0078-38AB535E-prod6
• When the Unthinkable Happens: Tax AUDIT!
http://creditexpert.epinions.com/finc-review-64E5-E5C6EAB-38B6113A-prod7
• 1040 Tax Reducers: whether or not you itemize
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• Somebody at the IRS has got a sense of humor
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