Don’t Forget these Deductions for your Tax Return

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Hopefully you aren’t procrastinating so much that it makes a difference, but its important to note that the due date for filing your 2011 United States federal income tax return isn’t the traditional April 15th, rather its April 18, 2012. This is due to the celebration of Emancipation Day (the day that President Lincoln signed the Declaration of Emancipation) a day earlier than normal (since April 16th is a Saturday this year). As you gather together all of your financial information for fiscal year 2011, minimize your tax liability by keeping the following deductions in mind:

Child Care Deduction
One of the most often overlooked tax deduction line items is the child care deduction. This deduction does not require the taxpayer itemizing deductions and can be taken by any taxpayer who works and has minor children or by any couple where both partners work and have minor children. It can also be taken if one member of a couple is handicapped or disabled and cannot care for the children while the other partner works.

The main items to have available to take the child care deduction are:

  1. Provider’s Social Security number [if an individual]
  2. Provider’s Tax identification number [if an organization]
  3. Provider’s legal name, address and phone number
  4. Total amount paid to Provider
  5. If more than one child, a breakdown of the total dollar amount paid per child

Many taxpayers overlook this particular deduction and it can make a big difference in their return, either by diminishing their payment due or often by increasing a taxpayer’s refund exponentially. In some states it can even result in a state tax refund even when nothing was paid in all year.

Business Expenses and Schedule C
Another often overlooked deduction is business expense. Many taxpayers do not realize that they need to file a Schedule C even for a tiny seemingly innocuous home business. One example is Avon ladies or other cosmetics representatives. They have a number of deductions such as product samples, telephone, home office, wardrobe, computer and office supplies and gas and repairs or standard business mileage deduction if they use their car to deliver product. Most women in this small business arena feel that their business is too small for deductions, but they can greatly assist in the family’s overall tax situation and determine whether they pay in April or get a much-needed refund.

Sales Tax & License Fees
If you itemize, one of the most overlooked deductions is your annual automobile license fee. The part of the fee that is based upon the value of the vehicle can be deducted.  Also, if you purchased any big ticket items during the tax year, the sales tax paid on those items could diminish your 2011 taxes as well.

Gambling
Gambling costs are by far the most overlooked item on tax returns. You can bet that it’s a sure thing that casinos will report any winnings to the IRS, but reporting what you spent acquiring that winning jackpot is your sole responsibility.  That’s why, if you’re even a little bit of a gambler, it is always best to save all of your ATM, check cashing or cash bank withdrawal receipts as proof that you had the wherewithal to make those bets that resulted in your winnings. In most cases, the amount of cash outlay over a one year period will be equal to what was won. In any case, you can write off an amount only up to the amount that you won. It would then be a wash, however, and at least you would not have to pay taxes on your winnings.

Charitable Contributions
Many taxpayers remember to deduct their cash contributions to their church and assorted charities, but forget about tangible goods that they may have deducted. Making sure to get a receipt from any charitable organization that you donate clothing, toys, furniture, appliances and other household goods to is always a good idea. In addition, if you have an old car that really isn’t worth very much if you sell it, it could be worth much more as a tax deduction, so be sure to donate it before the end of the tax year.

While it is your responsibility as a citizen of the United States to pay your fair share, it isn’t your duty to pay more than your fair share. Work within the boundaries of the tax code, and remember that the deductions are there for a purpose. If they apply to your circumstance, take full advantage of them!

Crafted by Stacy Nguyen for the firm of Bottar Leone, PLLC. who believe in American principals, like the responsibility of paying taxes and the right to a fair trial. A good Syracuse personal injury lawyer is ready to help you win your case.

Tax Carnival Ecstasy – October 25, 2011

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Welcome to the October 25, 2011 edition of Tax Carnival Ecstasy. In this edition of the Tax Carnival Ecstasy we have a number of great articles from different financial blogs. Roger White starts us off with 401k Contribution Limits in 2011 and 2012, for those looking to max-out their retirement savings. SteveR has a good post with What to Expect after Receiving an IRS Certified Letter, if you just discovered that you are being audited. And finally, Al Peters presents 4 Things You Should Know About Your Self Assessment Tax Return 2011. Hope you enjoy the material, bookmark, share, tweet, like on Facebook and come back soon.

Adriana Roux presents UPDATE: JASON SILVER, HEAD OF U.S DEPARTMENT OF ENERGY’S LOAN PROGRAM, STEPS DOWN posted atBankruptcy Attorney NJ RSS Feed, saying, “Solyndra bankruptcy news heats up as e-mails reveal conversations that show the Obama administration was forewarned to not loan the solar energy company the $535 million. Republicans demand answers and review emails that report irresponsible lending for the purpose of “green jobs” and perhaps to satisfy investment relationships – all with tax payer money!”

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Colin Hartness presents Figures Reveal Rising PPI Payouts posted at Fast Track Reclaim Blog.

Roger White presents 401k Contribution Limits in 2011 and 2012 posted at 401k Calculator, saying, “This posts lets you know about your 401k contribution limits for 2011 and 2012.”

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Al Peters presents How Much Can you Earn Before Paying Tax in 2011 posted at Tax Return Blog, saying, “Tax allowances and brackets change each year. This post shows highlights how much you can earn before you need to pay tax.”

SteveR presents What to Expect after Receiving an IRS Certified Letter posted at 2011 Taxes, saying, “Receiving an IRS certified letter can be a huge shock. You walk out on your mailbox sooner or later, peruse junk and bank statements, and then that you can see it.”

The DIV-Net presents Roth IRAs posted at The DIV-Net, saying, “Nothing is certain in this world except for death and taxes. For many dividend growth investors, this could be characterized as a feeling that they are being taxed to death. While I keep most of my assets in taxable brokerage accounts, I am always on the lookout to legally minimize my investment taxes as much as possible. In fact there is a way to invest in dividend paying stocks without ever having to pay taxes on your investment.”

Gemma Flannery presents Your Tax Code For 2011 posted at Tax Codes, saying, “Your tax code is used by your employer to calculate the amount of tax to deduct. Each year this changes with as tax brackets change. This posts explains the tax code for 2011.”

Al Peters presents 4 Things You Should Know About Your Self Assessment Tax Return 2011 posted at TaxFix Feed Update, saying, “There are many things that you should know about completing your tax return but this post higlights 4 of the top things to remember.”

That concludes this edition. Submit your blog article to the next edition of tax carnival ecstasy using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

 


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