The Seven Deadly Tax Sins: Commonly Missed Deductions

It's that time again, the April 15 tax deadline is loomingFor those at higher adjusted gross incomes limits
large. If youre like most people, you havent gathered all($80,000 single, $160,000 married filing jointly) the
of your tax records, let alone filled your return.Beforededuction is limited to $2,000 for 2004. This deduction
you dig in and get started, take this opportunity to firstmust be coordinated with other education credits and
review a list of a few tax deductions to which yousavings vehicles.Work-Related Expenses: You can
may be entitled if you itemize deductions but mostwrite off many work-related and work-search
people overlook. Many of these deductions areexpenses, such as education that maintains or
subject to various limitations, so consider gettingimproves your skills, certain business tools, dues to
professional help from your tax advisor andlabor unions, cell phone depreciation, certain expenses
accountant to determine which deductions you qualifyto search for job in your present occupation, including
for and which items apply to your specificemployment agency fees, resum preparation, and
circumstances. Remember, there are hundreds oftravel expenses (local and out of town) and cleaning
deductions throughout the tax laws; many of them canand laundry bills when on a business trip. Work-related
be quite obscure but also quite lucrative. Here areexpenses are subject to the 2% floor on
seven commonly missed deductions to keep top ofmiscellaneous deductions. Furthermore, if you buy a
mind:Points on Refinancing: With interest rates so lownew SUV for business use that weighs more 6,000
in 2003, there was a great deal of refinancing activity.pounds, and file Schedule C or other business tax
Any points you pay to refinance your home can bereturn you may be allowed to write off the full amount
deducted ratably over the life of the new loan.(up to $102,000 in 2004) in one year as a business
Furthermore, all unamortized points on old refinancingexpense subject to limitations.Clean-Fuel Deduction: If
are deducted in the year of the new refinancing.Healthyou are not in the market for a large SUV for
Insurance Premiums: Any health insurance premiumsbusiness, you still can get a deduction for your personal
you pay, including some long-term care premiumscar, another above-the-line deduction of up to $2,000
based on your age, are potentially deductible. Medicalfor 2003 ($1,500 for 2004) of the cost of buying a
expenses have to reach 7.5% of your adjusted grossclean-fuel vehicle or a car that uses a significant
income before they give you any tax benefit.source of energy other than gasoline. That includes
Self-employed people can deduct 100% of healthhybrid cars, such as the Toyota Prius, the Honda
insurance premiums paid for themselves, their spousesInsight and the Honda Civic Hybrid. You get the
and their dependents.Non-Cash Charitablededuction in the year you start using the car, and you
Contributions: If you have used your charge card formust be the original owner.Investment and Tax
contributions to charity, remember that the deduction isExpenses: In addition to forgetting to deduct
allowed in the year that you made the charge, nottax-preparation fees and the portion of your legal,
when you actually pay the bill. Also, you may write offaccounting or financial planner fees that relate to tax
certain out-of-pocket expenses related to charitableplanning, many people miss deducting investment
activities. Appraisal fees paid to value propertyexpenses. Those include certain fees paid to your
donated to charities may be taken as a miscellaneousfinancial advisor and/or broker and certain IRA fees
deduction subject to the 2% floor on miscellaneousyou may pay directly. It also may include mileage for
deductions.Higher-Education Expenses: If your adjustedmeetings and long-distance phone calls to your advisor
gross income wasnt more than $65,000 ($130,000 foror broker. Dont forget to include deductions for the
married, filing jointly) in 2003, you can get ancost of your investment publications or subscriptions,
above-the-line deduction for as much as $3,000 forsafe deposit boxes used for investment-related
any higher-education tuition and fee expense you paid.documents, these deductions are subject to the 2%
For 2004, the deduction can be as much as $4,000.floor on miscellaneous deductions.