According to the website Turbo Tax, there were over 51 million current tax payers who listed tax deductions over the year 2007. They claimed more than 1.33 trillion dollars in tax deductions. At the same time, more than 91 million people claimed the regular standard deduction. They managed to reduce their tax by 654 trillion dollars. These numbers look good for tax players who are doing standard deductions. However, you need to look at both methods of tax deduction when you are preparing to do you taxes. If you don’t, you may miss out on some great deductions.
The following are five tax deductions that are often overlooked. They are reinvestment dividends, state sales paid tax, charitable contributions, moving expenses and student load tax deductions.
State Sales Tax
This deduction is for people who live in those states without any state income tax. If you live in one of these states, you can deduct this tax. Most of the time, when people file for this kind of deduction, they overlook several things. These include taxes on automobiles, boats, airplanes, any any sale tax they may have spent on building supplies for the home.
If you have sole any mutual funds during the previous tax year, and have good capital gains, then you should calculate your reinvested dividends correctly and thoroughly. Because the amount that was paid for your investment increases each time that the dividends get reinvested, your capita gain may not be as big as you thought.
Any small items which you may have purchased while volunteering for charities are tax deductible. It is not only the larger contributions that you can receive deductions for, but these smaller ones as well. Keep track of what contributions you have made, such as driving mileage, or any small purchases.
Student Loan Interest
Any interest paid on students loans are able to be deducted. Whether the payment was made by a student or a parent they qualify for this deduction. This is because the IRS counts the interest payment as a gift. This is a good little deduction that students can capitilize on to reduce their tax liabilities.
One last good deduction is the moving expense tax. If you just started your very first job any time throughout the previous tax year and have been required to travel over 50 miles for work, this can be be deducted. This tax deduction can be claimed as part of the cost of any driving and the costs of any moving. However, it is only the moving and driving expenses which qualify. Costs of securing the employment are not included in these deductions.