Thursday, March 16, 2006
More Bang for Your Buck: Tax
It is possibly the most dreaded day of the year. One month from yesterday, taxes must be in the mail. But you may want to hold off filing those forms. In tonight's More Bang for the Buck, we're exposing the most overlooked deductions.
WSVN--Think about how nice it would be if Uncle Sam sent you money this year. Well if you feel filling out a tax form is equivalent to sending the IRS an IOU, you may not be claiming all your deductions.
Lorraine Dukes: "These deductions afford me a way to recoup some of that money I had to spend during the year."
As the owner of global graphics, Lorraine Dukes is very careful not to miss any lucrative write offs.
Lorraine Dukes: "I try to be as thorough as possible but there are times where things have been forgotten."
Jackson Hewitt Tax accountant Mark Daily says one of the most forgotten claims is the home office.
Mark Daily: "This office space needs to be totally dedicated to the profession."
If you do majority of your work at home and do not have another office, you can deduct a good percentage of the home bills - including the rent or mortgage, electricity, homeowners insurance, even maintenance of the room. But keep in mind, your home office cannot serve a dual purpose.
Mark Daily: "It can not be used for any personal use such as a guest room."
Plus don't forget work-related expenses. Magazine subscriptions, job hunting fees and educational classes are all deductible if they are within your current field.
Mark Daily: "If you're taking classes for personal enrichment that most likely is not deductible."
Also if you wear a uniform or a shirt with a company logo, dry cleaning is deductible.
Mark Daily: "Tax payers should be able to pursue every deduction they are entitled to."
And you are entitled to write off a bunch of out of pocket medical expenses not covered by your insurance.
Mark Daily: "Especially if they are prescribed by a physician."
Or if your doctor prescribes a weight loss program. But you won't need a prescription to claim a stop smoking plan.
Mark Daily: "That's a mistake that's often made."
Lorraine's looking forward to receiving her return. She sees the extra money as a bonus that she can recycle back into her business.
Lorraine Dukes: "It's as though the government has set aside a little money for me throughout the year after taxes. It allows for growth in a business especially in a small business."
Another tip - when it comes to car expenses. If you drive your car for work or charity, you can either claim your expenses or mileage. But the mileage usually adds up to a higher deduction.
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