Claim, claim, claim, deduct, deduct, deduct. That’s the name of the money-saving game when it comes to paying taxes. According to Kiplinger’s Personal Finance magazine, most of us are paying Uncle Sam way more than we need to simply because we are ill-informed.
By reviewing current tax laws there’s a good chance you can cut your tax bill in half. For example, did you know that you can write off the casserole you made and donated to your local soup kitchen? Financial experts maintain that if generous Americans kept better records, they could easily increase the amount they list as charitable gifts. According to the IRS, taxpayers can write off out-of-pocket costs incurred while helping nonprofit organizations. This includes driving your car to deliver food to shelters or other charities. If you drove your own vehicle to lend a helping hand to a nonprofit, you can deduct 14 cents per mile, plus parking fees and tolls. Just remember to keep all of your receipts and keep a running total of what and how much you donated. If your contribution exceeds $250 you’ll need someone from the charity to provide written documentation listing the services you provided.
If you were unemployed in 2011, then you deserve a break. The IRS is giving you one via a special claim. According to current tax laws, you can deduct expenses that accrued as part of your job hunt. Hopefully, you kept track of how much you spent looking for a position in the same field in which you were previously employed. If you did, then you can deduct the costs as miscellaneous expenses. The catch is you have to itemize and the expenses can only be written off if your total miscellaneous expenses exceed 2% of your adjusted gross income.
If you spent a good chunk of time and money looking for a new job in 2011 now is the time to dig up your receipts. Look for ones that show how much you spent on food, lodging and transportation, especially if you had to travel out of town for job interviews. Don’t forget to include cab fares, fees you paid to a headhunter, your Kinkos bill (e.g. printing costs for resumes, cover letters and business cards), and postage. Keep in mind that expenses incurred while looking for your first job don’t qualify. This deduction is exclusively for people job-hunting for a position in the same line of work in which they were previously employed.