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Should you take the standard deduction or itemize? Learn all about tax deductions and make sure you aren't paying more taxes than you actually owe.

10 expenses you may think you can deduct on your taxes, but can't

Kelly Phillips Erb Mar 9th 2010 @ 1:00PM EST Filed Under: Tax, Tax - Advice, Tax - Deduction

At tax time, there is plenty of advice out there about how to maximize income tax deductions. With so much publicity focusing on what you can properly deduct, it's easy to think that almost anything you spend money on during the year can be a potential tax deduction. Not so fast. That type of thinking can get you into some pretty hot water with the IRS.

Below is a list of expenses that might seem as if they should be deductible on your tax return -- but really aren't.

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Last day to claim special tax relief for donations to Haiti

Kelly Phillips Erb Feb 28th 2010 @ 6:00PM EST Filed Under: Charity, Tax - Deduction

If you want to take advantage of the opportunity to claim Haiti relief donations on your 2009 return, time is running out to make a donation. Qualifying contributions must be made after January 22, 2010, and before March 1, 2010 -- that makes today your last chance. You have until midnight to make a contribution. That means you have to text or charge your payment by the end of the day; additionally, checks need to be in the mail (with sufficient funds in your account to clear).

The rush is on because of special, temporary tax provision. On January 22, 2010, Congress passed a new law to benefit those who donate to Haiti relief efforts. The provision allows taxpayers who itemize deductions to deduct charitable donations to qualified Haiti relief organizations on their 2009 tax returns. The donations must be in cash or cash equivalent. This means cash, check, credit card or debit card contributions -- as well as text message donations. In-kind donations, such as donations of water or medical supplies, won't count for purposes of the accelerated deduction; those deductions will have to be claimed as they normally would, on a taxpayer's 2010 return.

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3 tax mistakes people make every day

Kelly Phillips Erb Feb 24th 2010 @ 10:00AM EST Filed Under: Tax, Tax - Advice, Tax - Deduction

Last week, our family made a now familiar trip to the hospital for my five-year old. She's been diagnosed with a form of vasculitis known as Henoch-Schonlein Purpura. It is a nasty and invasive -- but fortunately, not contagious -- illness that attacks the joints and blood vessels in your body. As a result, we have been making regular trips to her pediatrician and occasional trips to the hospital.

As I got into the car, my mind was simply fixed on getting her better. At no time did I note the odometer. On the way out of the parking garage, I was so thrilled to be leaving after a long five-hour day that I didn't bother to get a receipt. We stopped at the pharmacy on the way home to pick up some medication to ease her inflamed joints and while we were there, I picked up a few things I needed for the office that I had been too distracted to get earlier in the week. Back home, I breathed a sigh of relief. Our stressful day was done.

But I was also a little annoyed at myself. I had managed to commit a host of tax sins throughout the day. In fact, many taxpayers do exactly the same thing. It's easy to make tax mistakes every day, and no one, not even a tax professional, is immune. Here are three common mistakes that taxpayers make (almost) every day:

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Overlooked deductions: Home office expenses

Kelly Phillips Erb Feb 22nd 2010 @ 11:00AM EST Filed Under: Tax, Tax - Advice, Tax - Deduction

When my husband and I first started our business, we turned part of our house into a proper office. It was furnished with two desks, computers, and a copy machine on one side; a small conference table and chairs on the other. A separate phone line and fax ran only to that part of the house.

Ten years -- and three kids -- later, our old office is now our master bedroom. My "home office" is now a spot on the couch where I desperately attempt to get work done at odd hours. Fortunately, we've expanded outside of the home into a much larger office, so our dedicated work space is a few miles up the road. Even though I work from home quite a bit these days (it's part of what comes with being a parent and owning a business), we no longer claim a home office deduction on our tax return. We simply don't meet the criteria anymore.

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Business mileage deductions could cut your tax bill

Kelly Phillips Erb Feb 19th 2010 @ 2:00PM EST Filed Under: Tax, Tax - Basics, Tax - Deduction

A few years ago, it appeared any company that required you to drive for your business would just hand over the keys to a new car -- my friends in sales or service seemed to magically have a new vehicle every few months. In this economy, however, that has changed. While more jobs require reliance on a car (some for multi-tasking), fewer companies are footing the bill for it. But there's still some relief available; If you use your car for business or your job, you can deduct car-related expenses on your tax return.

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10 ways to maximize your tax deductions -- without itemizing

Kelly Phillips Erb Feb 9th 2010 @ 6:30AM EST Filed Under: Tax, Tax - Advice, Tax - Deduction

Too often, taxpayers are led to believe that if they don't itemize, then there are no real deductions available to them beyond the standard deduction. In reality, there are a number of deductions that a taxpayer can claim without itemizing.

Here are 10 ways to maximize your tax deductions -- without going through the trouble of itemizing:

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Real estate tax tips for 2010

Amy Pyle Feb 2nd 2010 @ 8:00AM EST Filed Under: Real Estate, Mortgages, Tax - Credit, Tax - Deduction, Refinancing

The real estate downturn that dominated 2009 leaves many on unfamiliar ground at tax time. Where better to look for advice than in suburban Los Angeles, where property values took a particularly vicious dive. There, Woodland Hills investment adviser Mark Kennedy shared his tips with WalletPop:

On Foreclosure: "Homeowners here are really getting screwed. If they do what's called a deed in lieu of foreclosure, their credit gets slammed, just like a foreclosure, and then, even if the bank forgives you, the IRS does not. Say you borrowed $500,000 and the house now is only worth $300,000. You would get a deficiency 1099 from the IRS for that difference. Doesn't make sense, but that's the rule."

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Overlooked deductions: job search expenses

Kelly Phillips Erb Feb 1st 2010 @ 2:45PM EST Filed Under: Tax, Tax - Advice, Tax - Deduction

The national unemployment rate stands at a whopping 10% -- higher than it has been for years. Despite all the talk in Washington about creating new jobs, the outlook is pretty scary: When the economy was recovering from the 2001 recession, it took two years to reduce the unemployment rate by nearly a full percentage point. For that to happen in 2010, a net total of about 3 million jobs would have to be created.

Realistically, that means tens of millions of Americans were searching for new jobs in 2009. Job interviews, resumes, and fees related to a job search can add up. Fortunately, those expenses are deductible on your federal income tax return. Here's what you need to know:

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From dependent credit to filing jointly, WalletPop experts take on your questions

Lan N. Nguyen Jan 29th 2010 @ 12:00PM EST Filed Under: Bankruptcy, Tax - Advice, Tax - Deduction

The tax code is over 18,000 pages long. And it's so complex that even Wall Street wizs like Treasury Secretary Tim Geithner make mistakes on their tax returns. WalletPop's experts are on hand to help answer your questions and correct mistakes before it's time to file.

Question:
I have been filing single with one dependent. I make less than $17,000 a year. My daughter is single, 19 years old and graduated high school May of 2009. She has worked and probably made less than $10,000 last year. I really need to claim her on my taxes if I can. She lived with me for over six months last year. I am getting conflicting advice. Some say that I can claim her all year and she can claim zero on her taxes. Some say that I can only claim her for six months, but I am not sure how that works -- how does she claim herself on her taxes?
--Elizabeth Weber, 43, Marana, AZ

Answer from Ralph Hymans, CPA based in Charleston, SC
With the facts presented, you should file your return as the head of household with one dependent. Your daughter must file her own return as a single because of her income in 2009, and she cannot take an individual deduction for herself.

You are allowed to do this because she is a dependent; your daughter is under the age of 19. Filing as head of household gives you your greatest tax benefit. The fact that your daughter lived with you for less than 12 months in 2009 is not relevant to the issue. The key issues are your daughter's status as single and her age of 19.

Continue reading From dependent credit to filing jointly, WalletPop experts take on your questions

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