40 Tax Breaks To Claim Your Biggest Tax Refund Ever | Fiscal Tax

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December 29, 2009
40 Tax Breaks To Claim Your Biggest Tax Refund Ever
categorized as: Tax Breaks

Don't Miss Out! Get your biggest refund in 2011 with our Tax Tips

NOTE:
 since this blog was posted in 2009 some of these items may be out of date and there are recent changes to the tax code as well. Please visit our Tax Tips section that has an updated list for 2010 or use our Ask A Tax Question form and we will be able to answer your questions as quickly as possible. Thank you for stopping by FiscalTax.com!


So far, this year lawmakers have passed over one-hundred tax law changes in order to benefit millions of individual taxpayers like you. With so many changes to the tax law, you're probably eligible for new benefits that were unavailable last year. That could mean significant savings on this year's tax return, but only if you know what the new benefits are and how to properly claim them on your tax return.

To help you claim all the tax savings you deserve we've compiled this list of 40 tax breaks.

New Tax Breaks

  1. The Biggest Tax Break Hoosiers Have Gotten - EVER - in October congress passed the Heartland Disaster Tax Relief Act of 2008 extending significant tax releif to residents of Indiana counties impacted by last year's severe flooding. Check out our Disaster Tax Relief Online Calculator to see how big your tax break might be.
  2. Economic Stimulus Payment and Recovery Rebate Credit - phase 1 of this credit was released as the famous tax rebate checks last year, but if you didn't get it or had a life changing event in 2008 you might be able to get an additional refundable credit on your tax return this year.
  3. Mortgage Debt Forgiveness Relief Act - for homeowners that experienced foreclosure on their primary home, Uncle Sam is allowing them to exclude the cancelled debt as taxable income.
  4. Housing Assistance Tax Act - tax payers that pay real estate taxes could possibly be eligible to increase their standard deduction amount by $500 ($1,000 if married filing jointly).
  5. Additional Child Tax Credit - this is a refundable credit and the formula for calculating it has changed which could mean up to $533 more per child in a potential refund.
  6. First Time Homebuyers Credit - tax payers who bought a new home for the first time after 2008 may qualify for a refundable credit of up to $7,500.
  7. Capital Gains Tax Reduction - for tax years beginning after 2007 the 5% minimum tax rate on qualified dividends and net capital gain is reduced to 0%
  8. Tax Breaks for Emergency Responders - members of qualified emergency response organizations will not have to include certain forms of income from state or local government in their gross income
  9. Increased Property Tax Deduction for Non-Itemizers - in 2008 Congress authorized up to a $500 additional standard deduction for non-itemizers and this has been extended through 2009
  10. Reduction of Phase Outs for Personal Exemptions and Itemized Deductions - the phase outs for exemptions and itemized deductions for certain high income tax payers was reduced by 1/3

Extended Tax Breaks

  1. Tax-free charitable donations from IRAs - tax payers 70.5 or older can direct up to a $100,000 tax free donation to a charitable organization from a traditional or Roth IRA
  2. Educator Expense Deduction- the popular above-the-line tax deduction of up to $250 for out of pocket expenses has been extended for another 2 years
  3. Qualified Tuition Deduction - Congress extended for another 2 years this deduction that allows students to directly deduct up to $4,000 of qualified tuition and fees paid to a college or trade school
  4. State and Local Sales Tax Deduction - this deduction actually expired in 2007 but was retro-actively extended through the end of next year and allows tax payers to deduct state and local sales tax instead of state and local income tax
  5. Alternative Minimum Tax (AMT) Patch - for the second straight year Congress has patched the controversial AMT rules to lessen the burden on certain middle to upper middle income households
  6. Maximum Captial Gains Tax Rate - the 15% maximum tax rate on qualified dividends and net capital gains has not changed

New Tax Breaks for Small Businesses

  1. Section 179 Depreciation Increase - the maximum amount that can be elected has been increased to $250,000 ($285,000 for enterprise zone and renewal community businesses; $350,000 for qualified Gulf Opportunity Zone property)
  2. Special Depreciation Allowance - a new 50% additional special first year depreciation allowance applies to most new property purchased and placed into service after 2007
  3. Increased limits on business vehicle depreciation - the maximum deduction you can take for a passenger car used in your business increased to $2,960; the maximum deduction you can take for a truck or van is now $3,160

Commonly Missed Tax Breaks

  1. Deducting state income taxes owed from the previous year - since the IRS will make you pay taxes on state and local tax refunds, it's only fitting that they will let you deduct the taxes you owed on prior year state and local income tax returns
  2. Deducting student loan interest -; the interest (not the principal) that you pay on your student loans can be deducted from your taxable income
  3. Deducting alimony payments (excludes child support) - Child support can NOT be deducted from your taxable income, but many people forget that alimony can
  4. Deducting points paid on mortgages / refinancing - if you refinance or pay down points on an existing mortgage those costs can be deducted from your taxable income
  5. Deducting fees paid for tax preparation - amateur tax payers (but not seasoned tax professionals!) often forget that they can deduct the cost of their tax preparation from the previous
  6. Deducting dependent care expenses - the cost of certain care for dependent children and adults can be deducted
  7. Deducting job search expenses - the cost of office supplies, travel and advertising incurred during the hunt for a new job is deductible
  8. Deducting non-reimbursed job expenses - items like uniforms, travel, lodging, meals and entertainment expenses that were required by your employer to pay out of pocket as a condition of your employment are not taxable
  9. Deducting moving expenses -; certain moving expenses can be deducted from your taxable income
  10. Deducting the expense of a cell-phone used for your job - if you're required by your employer to use your cell-phone for your job, then the business portion of your cell phone expenses is deductable
  11. Deducting property donated to a charity - donations of property (real estate, furniture, clothing, automobiles) to charity is deductable, but get a receipt from the charity and keep it to back up your claim
  12. Deducting mileage incurred in relation to charitable activities - if you donate your time or services to a charity, the mileage you rack up on your car to perform those charitable activities can be deducted at
  13. Deducting cash contributions to a charity - cash donations to charities are deductable from taxable income; keep a receipt for donations over $500!
  14. Deducting tithes to a church or religious organization - Many tax payers don't realize that what they put in the collection plate every Sunday is considered a cash contribution to charity and a potential tax deduction
  15. Deducting health insurance premiums - health insurance premiums can be deducted when you itemize
  16. Deducting dues paid to unions or professional organizations - if you pay union dues as a condition of your employment, then they can be deducted from your taxable income
  17. Deducting the cost of subscriptions to job related professional newspapers, magazines or journals - trade papers and journal related to your profession that you pay for out-of-pocket can be deducted from your taxable income
  18. Deducting home office expenses when the home is the primary place of business - so long as your home office is your primary place of business, you might be eligible to deduct a portion of your rent, mortgage, utilities and home improvement expenses
  19. Retirement tax credit for low and moderate income earners - to encourage lower income tax payers to save for retirement, Uncle Sam allows them to deduct the amount of their contribution from their taxable income (up to a certain point though!)
  20. Adoption Credit - households that adopted a child in 2008 can deduct certain expenses associated with the cost of the adoption
  21. Filing status changes due to marriage, divorce or death of a spouse - your filing status has a HUGE impact on your tax return; not knowing how these life changing events impact your filing status can mean the difference between owing taxes and getting a fat tax refund

This is just an overview of some of the most common tax breaks you could possibly take advantage of this year. With the economy as it is, it's more important than ever to ensure you don't miss out on any to keep your money in your pockets.

Some are brand new, but many have been around for a while and are commonly overlooked. If you use tax software, we strongly encourage you to bookmark this list and refer to it when you prepare your tax return to make sure you don't miss out on the tax savings you deserve. If you use a professional tax preparer, we encourage you to print this list and bring it to your tax preparer to make sure you aren't short changed on your tax return this year.

If you have any questions about these tax breaks, we encourage you to consult a tax professional or ask your questions in the comments below.
 

48 Responses

Fiscal Tax
05.20.2013
Dani,

You and your husband still claim your daughter together. The W4 he was filling out is to gauge how much federal income tax to withhold from his paycheck. If you do not usually owe each year he can put her down on the W4 as a dependent. The consequence of adding the dependent to the W4 is he will be able to keep more money from each pay check which would result in a lower tax refund at the end of the year. Ultimately though, either way you will not lose any money.
Dani
05.19.2013
My husband is about to start a new job. He will be making more money than me. He has to fill out the tax paperwork and isn't sure what he should do as far as claiming our daughter Should he claim our daughter or should i keep her as my dependant? We file our taxes jointly. Thanks
Fiscal Tax
12.13.2012
Jennie,
Yes you can, if you itemize. The only way you can deduct union fees from your tax return is if you have enough yearly expenses to "itemize deductions" rather than taking your standard deduction.
jennie
12.13.2012
i pay union dues not much but it adds up i pay 9.00 a week can i claim that on my taxes
Fiscal Tax
09.27.2012
Jeanette,

If you itemize and there are enough expenses to make, including medical expenses on your schedule A worthwhile, then yes, you can deduct the payments.
Jeanette
09.27.2012
I claim my child but my ex carries his health benefits and I am reimbursing my ex for half of the cost for the premiums. Can I claim this?
Fiscal Tax
01.30.2012
Donna,

If you have taxable income on your Federal or State return, claiming the mortgage interest and real estate taxes you pay may help you.
But if your only income is social security, then filing a tax return to claim those deductions will not give you a tax refund.
Donna
01.28.2012
I have been paying the mortgage payments since 2004 after my husband passed away can I claim any thing at all I pay the mortgage flood insurance an home owners insurance an taxes I DRAW SOCIAL SECURITY FROM HIM
Fiscal Tax
04.04.2011
Jeremy, without knowledge of your ex-union's plan or type of insurance, it is impossible to give you a definitive answer. However, since you have received no 1099 for the insurance disbursement it is probably not a taxable distribution. We suggest not claiming on your 2010 return.
Jeremy Erickson
04.02.2011
I am a permanently disabled union electrician and have had a $5,000 life insurance policy with them for 30+ years. Well, in 07/2010, the union cancelled the life insurance program and paid one-half of the total death benefit amount to the individuals previously enrolled. I received $2500, however, I have absolutely no idea of where to file this income if I need to file it at all. I received not type of tax form, no 1099-G or 1099-Misc or W2 or anything. Do I even need to claim it on my taxes? I don't want to get audited later and find out that I was supposed to pay taxes on it.
Fiscal Tax
02.17.2011
Angie, In most cases, Married Filing Joint is more beneficial than Married Filing Separate. A filing status of Married Filing Separate cannot claim the following credits: earned income credit, child care credit, adoption credit, education credits. You asked about "get his residence" - I assume you mean applying for a mortgage to purchase a home. That question should be directed to a mortgage lender or broker.
Angie
02.16.2011
Thanks for all the posted info. Just wondering if it would be better for my husband and I to file taxes separately? we have two children and he makes more money than I do. I only worked part/time on 2010. And If we file separate would that affect him on trying to get his residence?
Laura
01.07.2011
If two divorced parents claim the same child then the tiebreaker rules give the exemption to the parent with whom the child primarily resided (by number of overnights) during the year. If the parents had equal time with the child, then the exemption goes to the parent with the higher income.

However, only one parent can file electronically. If the second parent to file is the parent who should be claiming the child, that parent would have to send in a paper return, by mail.
jenny
01.07.2011
what if divorced parents claim same child?
Laura
01.04.2011
Nikki, if you made less than $3650.00 then the baby's father could claim you if you lived with him the entire year. He can also claim the baby.

If you did not live with him the entire year, then he could claim the baby, but not you.

There are also rules as to what tax benefits he can claim for the baby if the baby lived with him from less than the entire time since birth, or less than six months if the baby was born before 2010.

You may need to file your own tax return as well, if you had withholding that you want to get back, and your state may require you to file a state return even with a small amount of income. You would need to file as the dependent of another if your boyfriend is going to claim you.

It might be wise for the two of you to see a tax professional together, to make sure that everything is done properly.
Nikki
01.04.2011
I had a baby this year and I live with the father but we are not married, should I file separately or should I have him claim both our son and myself?
Fiscal Tax
12.09.2010
You can deduct "out-of-pocket" dental expenses on line 1 of Schedule A - Itemized Deductions.
J
12.08.2010
Very useful tool. I see you can claim some dental. I will have to have a bridge replaced due problems I've had, and it not being inserted correctly. After everything, I will be paying over 9,000. Will I be able to have a tax deduction on that?
Fiscal Tax
11.01.2010
Some of the expenses would be deductible. Following is text from IRS Publication 17.

"Cruises and conventions. Certain cruises and conventions offer seminars or courses as part of their itinerary. Even if the seminars or courses are work-related, your deduction for travel may be limited. This applies to:

* Travel by ocean liner, cruise ship, or other form of luxury water transportation, and
* Conventions outside the North American area.

For a discussion of the limits on travel expense deductions that apply to cruises and conventions, see Luxury Water Travel and Conventions in chapter 1 of Publication 463.

IRS Publications may be viewed and downloaded from the IRS website (www.irs.gov).
Michele
10.31.2010
I teach Science and would like to take a Science Teachers' Adventure Cruise to Alaska. Would the expenses incurred be deductible?
Fiscal Tax
03.03.2010
Employee expenses that are unreimbursed by employers can be claimed on form 2106 and Schedule A.

You have a choice between claiming your state and local income taxes, or your general sales tax. In states that have a state and local income tax, its generally more advantageous to claim your state and local income tax, rather than sales tax.

However in years where you buy very big ticket items, (that are not special items for tax treatment that year) it might be advantageous to claim your general sales tax instead of state and local income taxes.
Richard
03.02.2010
The Educator Expense is maxed at $250. Is their a place where you can deduct any excess costs over $250? Also, if you itemize and declare a state income tax deduction, is there any way you can declare the general sales taxes incurred (for other than special items)?
Fiscal Tax
02.27.2010
Premiums for life insurance are not deductible. However, premiums for health insurance and long term care insurance are deductible.
Nicole
02.27.2010
Can I claim the premiums I paid on my life insurance policy?
Fiscal Tax
01.26.2010
Erik, the amount of canceled debt reported on 1099-C should be reported on the 1040, line 21, "other income". However, that income may be excluded from income in certain situations. If you were insolvent or in bankruptcy, you can exclude the canceled debt from income. To exclude this income, prepare form 982 and include with your return.
erik
01.25.2010
i have a 1099-c form for the cancellation of 1173.00 worth of personal credit card debt, do i have to put this on my tax return? if so, where do i put it?
Fiscal Tax
01.24.2010
Dr. V

Generally, insurance settlements which reimburse you for or pay your medical expenses are not taxable income and are not reported on your tax return.
Laura
01.22.2010
Luis,

You can still file your US income tax return if you have US income. If you do not have US income you do not need to file a US income tax return. You can do it online at Taxesanytime.com
Dr. V
01.05.2010
How do you claim money that you got from an insurance claim due to accidental injuries in another country?
Luis
01.03.2010
I was deported from the U.S and I still have my valid ssn and DL but not my Green card. Can I still filing taxas because I still making money over the Internet (sales) and what should I do? please help rnssotoo@hotmail.com
JatStraikarFan
12.07.2009
A lot of of people talk about this matter but you said really true words!rn
ADT
11.13.2009
I was recently on a work trip that required me to use my personal cell phone for work. My office manager told me that they would reimburse me at $0.45 per minute. It is going to be a fairly substaintial amount of money. Is there any regulations like fuel mileage for this? Also, is my company able to deduct what they pay me for my minutes on their taxes?
Fiscal Tax
07.16.2009
The cell phone can be deducted if used for business purposes. In your example, 70% of the cell phone charges would be deducted on Form 2106. The 2106 expenses are carried to Schedule A, where a 2% (AGI) exclusion is applied. Consequently, a very small, if any, deduction would be realized.
Mike
07.16.2009
My company provides cell phones to its employees but the carrier they use has very poor reception in the majority of the area I operate in, so I use my personal phone for business. 70%+ of usage is business related. Can I claim this as a deduction? Any restrictions on claiming this via e-filing?
Christina
04.07.2009
Please be advised that health insurance premiums are deductible as long as they are made with after tax dollars. Alot of companies use pretax dollars to pay your part of premiums.

Please if any one absolutely has to take money out of retirement early, be have it taxed 30% to cover the 10% percent penalty imposed by the IRS. I am a tax preparer and alot of people get into trouble taking money out early.
Fiscal Tax
02.11.2009
Bennie, if you paid for health insurance out of your own pocket it can be reported on schedule A. This gets added to all your out-of-pocket medical expenses. However, you can only deduct the amount of medical expenses that you paid in excess of 7.5% of your Adjusted Gross Income. This 7.5% floor is usually pretty hard to get above unless you had A LOT of medical expenses.
Fiscal Tax
02.11.2009
Robyn, unemployment benefits ARE taxable income. You should have already gotten a 1099-G from the unemployment office. You can think of this form as a W-2 for unemployment benefits, it will tell you how much you got last year and need to report on your tax return.
Bennie Gates
02.08.2009
If a person pays is health insurance out of his own pocket is that tax deductible
robyn
02.05.2009
I was wonderin how unemployment works as far as filing?Is it possible to owe n how?i worked most of the year though
Fiscal Tax
02.03.2009
Kenyata, are you a teacher? If so and also if those receipts are for classroom expenses, you can deduct them using the Educator Expense Deduction. For more info, see our blog post on Tax Breaks for Teachers.
Kenyata
02.03.2009
Can I use my school reciepts to file my taxes
Fiscal Tax
02.03.2009
Rose, unfortunately federal tax liability is not deductable.
rose green
02.03.2009
I owe 4 thousand dollars in federal taxes from last year can I claim that this year
Fiscal Tax
01.24.2009
Premiums for medical, dental, and vision insurance are tax deductible. Additionally, doctor, hospital, laboratory, and prescription expenses are deductible. These deductions are taken on Schedule A. However, only medical expenses that exceed 7.5% of Adjusted Gross Income (AGI) are deductible. The Schedule A itemized deductions are only applicable if they exceed the standard deduction thresholds of Single ($5,450), Head of Household ($8,000), and Married Filing Joint ($10,900).
Fiscal Tax
01.24.2009
Carmen, health insurance premiums are tax deductable. However, when employers deduct the premiums from employee paychecks, many do so with pre-tax dollars which can not be deducted since they were never taxed in the first place. You should confirm with your employer whether your premiums were paid with pre-tax or post-tax dollars before claiming them as a deduction.
Carmen
01.24.2009
This is great information.. I have a question about deducting health insurance premiums. Isn't this the amount we pay off of our paychecks.. that our employers deduct from our paychecks for medical/dental/vision coverage? I was told last year that these were not deductible, and that is how I filed my claim. Can you provide more info? Thank you very much. I've bookmarked this page and sending it to my friends... Thanks!
Fiscal Tax
01.14.2009
Jeff, glad we could help! You can click on many of the tax breaks to get more info. Be sure to keep coming back. As we add more articles about these tax breaks to our site, we'll be linking to them from this page.
Jeff
01.14.2009
Great post! I bookmarked this page so I can reference it when I file my taxes. Thanks!

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