Deductions Missed In Taxes
By: Nidhi Chawla
The deductions which are often missed by tax payers are as follows: Old points on refinancing: The unamortized points on old refinancing are deducted in year of new refinancing. These one deduction lots of people miss.
New points on refinancing: Any point you pay to refinance your home can be deducted on monthly basis over the life of new loan, so if you refinance your mortgage on a 20 year term, seven out of 240 months will be passed after dec31.
Non cash contributions: This deduction is allowed in the year of the charge not, when actually you pay the bill. If you emptied your closets and gave everything to goodwill or charity. The value for those items will be deductible, the rule for non cash charitable contributions the rule is: no receipt means any deductions if you get audited.
Health insurance premiums: The health insurance premiums including long term care premiums are deductible. but if you are self employed and not covered by any employer paid plan you can deduct your 100% health premiums above the line
Investment and tax expenses: We many a times forget tax planning and investment expenses because they are part of miscellaneous expenses. The total must exceed 2% of adjusted gross income, before you get any tax benefit. Many people short change themselves on the deduction of investment expenses.
Casualty deductions: Examples can be taken from hurricanes Katrina and Rita, which devastated the gulf coast, so it your area is declared an affected disaster area. You can claim your loss on the present tax return.
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