YOUR JOB
This Article Could Save You $400
Believe it or not, most Americans pay an average of $400 more in taxes than they owe every tax season because they've missed tax breaks - many of which are job-related. Don't be frightened by words like "deduction" and "itemize." These words can mean cash in your pocket, especially when combined with employer plans that allow for pre-tax savings. Check out these ways to reduce your tax bill:
These tax breaks do not require itemizing:
- Employer savings plans: 125 Flexible Spending Account; 401(k) or 403(b) retirement accounts
- Earned income tax credit
- Education "tuition and fees" deduction and Lifetime Learning and Hope credits
- Student loan interest deduction
- Child tax credit
- Dependent care credit
These deductions can help you lower your adjusted gross income:
- Business expenses for the self-employed
- Job-related moving expenses
- Military reservists' deduction
- Student loan interest
- Tuition and fees for higher education
If you itemize, these deductions may help you save even more:
- Out-of-pocket job expenses not reimbursed by your employer
- Job-related mileage
- Points paid on home loans
- Cash and property charitable contributions
- State and local income taxes or general sales tax
- Personal property taxes
- Mortgage interest and real property taxes paid on your residence
Make sure you haven't missed any credits or deductions that could save you money! Several tax programs such as TaxCut can help find deductions* or credits which apply to your tax situation and which may help to save you hundreds of dollars.
*Availability of deductions varies by individual tax situation.