Tax Time! Any great deduction information?

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Girl In the OC_IHB

Girl In the OC_IHB

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Tax Time! Any great deduction information?

Ok, so as many of you I know have found themselves in the same situation... thought we could do a little brainstorming!

I sold my house a couple years ago, and have been renting, waiting this bubble out in hopes to buy back into the market in a year or two...

I am neither a CPA or an EA... and thank goodness we are all so very fortunate to have a few on the site!

So, now I find myself without my homeowner tax deductions... trying to find ways to protect my earnings (after all, it will be more to use as a down payment eventually!).

Anyone up for posting some ideas or new information on useful deductions?

I'll start:

- I participate in my employers 401k plan up to the employer contribution (as Suze Orman recommends) to reduce my taxable earnings...

- I plan on participating in my employers FSA plan this year too

- Keep track of my mileage over what my employer pays on my expense plan

- Toll road fees

- Cleaned out my closet and donated a bunch of stuff to Goodwill

- Church donations

- Post office box fees

- Keep better track of receipts for business lunches/dinners etc

So, anyone have some great ideas... or anything new they have come across that we could all benefit from? We have a lot of very smart people on this site... and I would love to know some good ideas for protecting earnings and assets!

Thanks everyone!

GITOC
 
Well, you've probably realized by now that I'm not one of the smart Peeps but I heard from a good source that if you bought a Car last year you can claim the Tax?
 
I just finished my tax returns... if you have a simple return, file the federal return free thru taxact.com or turbotax...be sure to not sign up for the 'upgrade' versions... CA tax return is free thru the franchise tax board... just be careful, it's not the most user friendly (if it times out, you lose all info!).. that should save about $30 in filing fees.. of course you can do it by hand by who does that these days? plus you get your return back faster due to electronic filing..

be sure to deduct your car reg fees (don't forget the reg fees you paid in early 2007, people tend to forget them)

for 2007, charity cash donations need a canceled check or receipt for ANY amount

clothing donations can go up to $500, if you have more, it requires a detailed receipt (appraisal?)

remember the feds need to tax your 1099G!, many people don't report their state tax refund thinking they're getting double tax, but it's not, think about it.

2007 was a bumpy year for stocks.. report your losses if you sold them

vote republican next election to save on future taxes
 
"Well, you've probably realized by now that I'm not one of the smart Peeps but I heard from a good source that if you bought a Car last year you can claim the Tax?"

Is this only for the state of Washington?
 
if you work as a contractor for another company they normally give you a 1099 and you can do a P and L from business and you can deduct a lot more things. I do work on the side creating websites and it does help tremendously.

Also another good deduction is claiming dependants. Do you have any kids, parents, relatives that you can use for that purpose?
 
waiting_to_buy:

can you go into a little more detail about what you mean by this: "and you can do a P and L from business and you can deduct a lot more things." I'm in the same boat as you and would also like to maximize my deductions!
 
Ninja - when you filed online, you should have received electronic filing instructions. For the IRS, since you signed the returns electronically, you dont need to do anything else, in fact, I actually did not get one for the IRS. I did get one for the CA FTB, but it is not required to be mailed in, it just has to be signed by you and your spouse within one day of your return being accepted by the FTB and held in your files. It actually says on the form 8453-OL in the upper right "Do not mail in to the FTB"
 
my understanding is toll road fees are not deductible if its just for your daily commute but they could be work-related travel expenses similar to how you count mileage.

as for the car, the tax preparers often ask whether you purchased a car, boat, or any other large purchase because you can deduct either your total state sales tax or state income tax from your fed tax return. obviously you'll want to deduct whichever is higher but unless its really obvious what your total sales tax for the year was because you made a large purchase (i.e. bought a new car or fully furnished a new house,) most ppl just deduct the state income tax as opposed to adding up the tax portion from every starbucks, old navy, and trader joes receipt you saved for a year.
 
bix - Don't mail it. Just keep it.

acpme is right. Toll road fees are not deductible expenses for W2 employees for their commute. But they are deductible if the employee is driving from jobsite to jobsite, but are subject to the 2% limitation on AGI.

acpme is also right about sales tax or state income tax deductibilty. There are some states without state income tax and the sales tax deduction is then very helpful.

BlueFire - You need to read up on what constitutes biz deductions for your biz.

Ok, what else?
 
zovall,

as awgee just pointed out, Washington has no state income tax, so we got to deduct the full sales tax amount. I feel for you folks in California, sales and state income taxes... and you still can't balance the budget.
 
blue fire:

you should ask your accountant about this. i didn't do my taxes last year but my accountant filled out a tax form that i loss money from my business (the contractor job can act as a business) and you can deduct things like some rent, utilities , expenses (car, computer, etc) because as a contractor you work from home. That could deduct your taxable income and reduce your taxes. I dont know the tax form name but i just know it says "Profit and Loss from business".
 
wtb - It is a schedule C. And you may be able to deduct "home use for business" expenses, but I suggest you read up on the requirements for these deductions, especially depreciation and the ramifications thereof. And a loss on a schedule C is a flag.
 
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