Tax Filing Season is upon us yet again. Most employees have already received their W-2s, the rest should get theirs before January 31st. As soon as you get your W-2, it's time to file your taxes.
This week, from January 18-22, I'm going to go over all the important Tax Forms and documents needed to file your Taxes. Today is part two, Documents for Common Tax Deductions.
Common Deductions for 2009
First-Time Homebuyer Credit- Claim the First-Time Homebuyer Credit with Form 5405. I'll cover Popular 2009 Tax Credits more extensively in a later post.
Charitable donations- you can claim charitable donations, volunteer expenses, and even out-of-pocket mileage costs as tax deductions. Be sure to itemize these deductions and provide substantiation for the IRS.
Student loan interest- Claim student loan interest on Form 1098-E. You can take this deduction even if you're not itemizing your Tax Deductions.
Traditional or Roth IRA contributions- Traditional IRS contributions may or may not be tax deductible. This depends on the amount of income you made for the year and whether you participated in a retirement plan.
Home mortgage interest- Interest and points on your home mortgage or a home equity loan may qualify as a Tax Deduction. Claim this deduction on Form 1098.
Vehicle tax or personal property tax- As part of new tax laws enacted this year by congress, Tax paid on a car, truck, boat, motorcycle, or property other than real estate could qualify for a Tax Deduction. IRS Publication 17 has the facts you need on this new Tax Deduction.
Sales Taxes paid on a new vehicle purchased after February 16, 2009- If you bought a qualifying vehicle anytime between February 17, 2009 and December 31, 2009 you can deduct the state and local sales taxes paid. You're not required to itemize to claim this deduction.
Tax Deduction Tip: Be sure you qualify for any deduction before you claim it. Each Deduction has specific qualifiers that you need to review carefully. Don't get careless and wind up in IRS Debt just because you wanted to save a little dough this tax season.