Bookkeeping Tips: Maximize Your Tax Deductions

Understanding tax deductions can be difficult. Each year IRS tax law changes and knowing which itemized tax deductions are legal and offer the greatest potential for reducing tax debt can be nearly impossible for the average person. There are additional non-itemized deductions

According to an article on WalletPop on AOL written by Kelly Phillips Erb, “While it’s true that many taxpayers rely on popular itemized deductions, those aren’t the only deductions available. Taxpayers who file a form 1040 may also opt to claim a number of what the IRS calls ‘adjustments to income’ — that’s another way of saying non-itemized deductions. Since deductions reduce your taxable income, they’re a relatively painless way to chip away at your tax bill.”

Erb goes on to explain a variety of ways to maximize your tax deductions

1. Educator Expenses. People working for schools such as teachers (grades K-12), counselors, principals or aides who work in a school at least 900 hours during the school year in 2010 can take a deduction of up to $250 for qualified expenses.

2. Alimony. Alimony payments can be deducted on your federal income tax return. There are parameters to follow so make sure you understand how the alimony payments can be deducted properly.

3. Student Loan Interest Deduction. Anyone paying off college loans can claim interest on a qualified student loan as a deduction. Again be certain to review the tax law so you make certain your loan interest can be legally deducted.

4. Career-Related Moving Expenses. In 2010, if you moved for job or career reasons you may be able to deduct your moving expenses. Ask your accountant or bookkeeper.

5. Health Savings Account Deduction. Health Savings Accounts (HSAs) are tax-favored accounts that you may be able to take a deduction for those contributions that you make to a HSA during the year.

There are a a variety of ways to maximize your tax deductions. For more information read the rest of “10 Ways to Maximize Your Tax  Deductions Without Itemizing“, by Kelly Phillips Erb on WalletPop.  You can also speak with your bookkeeper or accountant about the options for non-itemized deductions.

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Tags: advice, deductions, IRS, itemized, non-itemized, taxes