subject: Tax Deductions 2010 - Are You Getting as Much Money Back as You Should Be? [print this page] Tax Deductions 2010 - Are You Getting as Much Money Back as You Should Be?
Wouldn't it be great if the IRS would do audits to determine whether taxpayers had missed any deductions they were entitled to? Sadly, that's not likely to happen. Meanwhile, many taxpayers miss important deductions that could save them a substantial amount of money.Professional tax preparers hear over and over again, "Really? I can deduct that?" On top of that, each year there are changes to the tax laws that most people simply aren't aware of. The year 2010 was a big one for tax law changes. Not only were there numerous changes to tax deductions in 2010, but by the end of the year some of the earlier changes were changed again. It can be almost overwhelming for the average person to keep up. But, not doing so can result in too much tax being paid because not all applicable deductions were taken. Although the tax deduction changes in 2010 are too many to cover here, the following are some of the most important deduction change for 2010 returns. One of the most significant changes in IRS deductions applies to the First Time Homebuyer Credit. There have been changes from the Homebuyer's Credit of 2009. The one in 2009 had to be repaid; the 2010 version of this credit does not, provided you've lived in the house the requisite amount of time to qualify. The 2010 law also includes a credit for long-time homebuyers, not just first time homebuyers. The IRS does require certain closing documents for taxpayers to claim the credit. There are many types of professional expenses that taxpayers may be able to deduct. There are many deductions for travel and transportation expenses if you know what to claim. And, military personnel qualify for any number of special deductions. Many deductions set to expire after 2009 were extended until the end of 2011 so they still apply in 2010. These include changes to the Qualified Tuition Expenses, Teacher Classroom Expenses, IRA Distribution to Charity, and State and Local Sales Tax Deductions. Changes were also made to the Alternative Minimum Tax to prevent middle class taxpayers from paying it. Moving into 2011, the Standard Mileage Rate for deducting up to four automobiles used for business changed, as did the Moving Rate and Medical Travel. The requirements for keeping records for cell phones have been modified. The American Opportunity Credit was extended and energy credits have changed. Although it can seem overwhelming to stay abreast of all the tax law changes and deductions, doing so can almost certainly save taxpayers a substantial amount of money each year. Even if you use a professional tax preparer or a software program to prepare your taxes, taxpayers still need to understand which deductions may apply. Taking time to stay informed can make the difference between getting a smaller refund than you would otherwise be entitled, or paying in far more than you would need to pay if all applicable deductions had been claimed.
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