Tax Tip: Don’t Overlook these Tax Deductions on Filing your Income Tax Returns for 2011

On year 2010, an estimated 40 million Americans filed their taxes on the very last minute.  With these staggering figures, it’s easy to make an educated guess that a lot of taxpaying citizens overlooked important tax deductions they are entitled to.  Consider that an energy efficient upgrade on your homes (windows, doors, solar panels) would have given you a maximum total tax credit of $1,500. Meanwhile this year, you only qualify to a maximum of $500 in tax reductions.

It is therefore advisable for you to be aware of relevant tax deductions that give you a considerable amount of savings.  If you’re looking to find ways to cut your total amount of taxes you would have to pay for 2011, carefully go through this list and take advantage of these tax deductions.

W2 Unreimbursed Employee Business Expenses (Form 2106)

Use this check-list and fill it up on your Form 2106 tax forms.  Qualified individuals for these tax exemptions are those that incurred job related expenses but failed to avail of proper reimbursement from their employers.

The recognized expenses for tax deductions are:

•Union dues

•Medical examination fees required by your employers

•Work-related subscription fees (journals and magazines)

•If you have to buy your own uniforms and work-related clothes

•Purchased tools and equipments for accomplishing work-related tasks

•Legal fees for work-related concerns

•Tax preparation fees from previous year

•Work-related education fees incurred during the course of employment

•Computer and cellular depreciation that is purchased in order to perform your job

When do you qualify?

A 2% total of unpaid job-related expense on your AGI or adjusted gross income is required in order for you to qualify for this tax deduction.  That means if you have an AGI of $20,000, your total deductible tax credit on this category should be at least $400. 

Tax Deductions with your other Finance Activities

 

•Paid for foreign taxes

• Penalties on premature savings withdrawal

•Incurred loses due to theft and embezzlement

•Fees paid for financial advisors

•Fees for safe-deposit box to secure substantial investments (e.g., heirloom jewelries, deeds, bonds, stock certificates)

•Stocks and securities investment losses

•Legal costs in alimony collections

•Alimony

 

 

Property Deductions on your residence and other properties

•Management costs and additional fees paid on commissions for properties you rent out

•Penalties on mortgage prepayments and late fees

•Home improvements

•Sale of property costs and commission fees

•Casualty damage (fire, flood, hurricane, storm) or theft losses

•State tax on personal properties with regards to vehicles and boats

•Paid real estate fees incurred due to sale or purchase of property

•Paid points to seller with home purchase

•Home mortgage and refinancing points

Tax Deductions to Medical Costs

•Rehabilitation for alcohol and drug abuse

•Transportation costs for commutes to medical providers and health facilities

•Premium fees on health insurance for self-employed individuals

•Lodging and travel expense for health-related reasons

•Nursing home medical expenses

•Long-term health care insurance premiums

•Birth control expense with prescription

•Special equipments for disabled persons

•Job related incapacity costs for a disabled person

•Hearing aids, contact lenses, and prescription eye glasses

Deductions due to Charity Donations

•Fees incurred due to appraisal services for donations of property to charitable organizations

•Increased value of donated property to charity

•Volunteering expenses not reimbursed by charity organization

•Goods and properties donated to charities

   

It would be helpful for you to keep notes of this valuable list of possible tax deductions you may qualify for.  Make sure you keep an organized record of receipts and other proofs of statement for an easier tax consultation with your accountant who get paid by the hour.