HOME & FAMILY
*Did you finally invest in a home to call your own? Although you now have to pay property taxes (ouch!), the government will help make the transition a little easier on your wallet, thanks to the First-Time Homebuyer Credit. As long as you haven’t owned another home in the past three years, you’re entitled to receive a credit of up to $8,000.
*Going green can help you almost as much as the planet. If you added solar panels, geothermal heat pumps or any green energy-producing system to your home, the IRS will give you a credit for 30 percent of the total cost (there’s no maximum amount). The same goes for energy-efficient improvements like installing exterior windows, extra insulation or a new heating system (there’s a $1,500 cap on those). Also, if you bought a hybrid car, you may qualify for a tax credit, which varies depending on the make and model of the car. To view the complete list of “green” systems that qualify, go to IRS.gov.
*Those monthly mortgage payments can really hurt, but here’s something to take away the sting: If your total mortgage is less than $1 million, you can deduct the interest on it.
*If you welcomed a new addition to your family this year, you’re entitled to a maximum $1,000 tax credit (per child). The expenses associated with adoption -- attorney fees, travel costs, court fees -- can get you a credit (up to $13,710) as well.
MONEY & CAREER
*The upside of that pain-in-the-you-know-what job search: You can deduct the costs of looking for a new gig, like résumé services, employment-agency fees and mileage driven (or flown) to interviews -- whether or not you actually got hired.
*If you did land a new job (woot!) but had to relocate, you can deduct the cost of the move, including truck rental, movers and boxes -- if your new job is at least 50 miles farther from your old home than your old job was.
*One popular solution to unemployment? Freelancing, which in IRS-speak makes you an “independent contractor” and allows you to deduct the cost of any expenses that are “ordinary and necessary” to your business. Translation: You can deduct any software, equipment or anything else you need to perform your job. (Sorry, but while all those lattes may have been “necessary,” they don’t count.)
*Like to keep up with your industry’s news by reading the paper or a trade journal on your way to work every morning? You can deduct all of those job-related professional journals and newspapers.
*Whether or not you came out ahead in the stock market last year, you can deduct most investment-related expenses you incurred, like fees for a financial adviser, subscriptions to financial publications (yup, The Wall Street Journal counts), software and online services used for investing, and any IRA custodial fees.CHARITY
*You probably know that charitable donations are tax-deductible, but you may not realize what actually counts. If you ran a 10k to raise money for cancer research, you can deduct your entry fee (but first you’ll need to subtract the value of any promotional T-shirts or other swag you received, including that crappy water bottle). Same deal if you bought a raffle ticket at a friend’s charity event, donated items to Goodwill (just remember to get a receipt when you drop off your stuff) or drove to a soup kitchen (mileage counts!).
*Spent your honeymoon or vacation days on a kick-ass volunteer vacation? Your do-gooder ways deserve a reward! As long as the organization you volunteered with qualifies (find out more at IRS.gov), you can deduct expenses much like you would for a business trip. That includes things like travel costs to get to the volunteer site (like airfare, airport parking, rental cars or mileage if you drove yourself), as well as your lodging and other related expenses, such as all meals you had while volunteering.EDUCATION
*If you got out of the job market altogether and went back to school, the IRS will reward you for enriching your mind. Any college or grad student enrolled in a course at an eligible institution (go to IRS.gov for more info) can deduct up to $4,000 of the tuition. Just taking classes on the side to enhance your professional skills? You can deduct your tuition, books and supplies.
*You can deduct the interest on student loans (up to $2,500), as long as your yearly income is less than $70,000. (If you’re married and filing jointly, your combined income must be less than $145,000.)HEALTH
*Medical Treatment (like Lasik), as well as any prescription drugs not covered by your health insurance (as long as the combined cost is more than 7.5 percent of your adjusted gross income), is totally deductible. That includes any fees you had to pay to doctors, dentists, chiropractors, eye doctors and psychiatrists, including co-pays. Items like eyeglasses and contact lenses, crutches, special orthopedic shoes or inserts, and hearing aids also count. If you’ve been paying for your health insurance out-of- pocket -- meaning your plan is not provided by an employer (or your spouse) -- your premiums may be deductible from your gross income. Not a bad break, huh?
*If you finally kicked your pack-a-day habit (or at least tried to; don’t give up!), your lungs say thank you—and so does Uncle Sam. If you enrolled in an IRS-approved stop-smoking treatment program (get all the details at IRS.gov) in 2010, you can deduct the cost of the cessation program. Products like Nicorette and the patch don’t count unless they were prescribed by your doctor (not a bad reason to make an appointment for a physical). If you’re battling a different addiction, keep in mind that many alcohol or drug-abuse programs are also deductible.MARRIED COUPLES
*First time paying taxes as Mr. and Mrs.? Well, that doesn’t necessarily mean you should file your taxes jointly. Married folks who file jointly pay taxes on their combined incomes (as though it were a single income), rather than each person having to pay taxes on his or her own income, so often they end up owing less than if they filed separately. Plus, marrieds can combine deductions (translation: more money saved) and are eligible for certain benefits like the child tax credit and earned-income credit. But filing together isn’t always the best option. If one of you is self-employed or is likely to owe a large amount, it may be best to file separately. Bottom line: Calculate your taxes both ways before deciding how to file. Oh, and if you took your spouse’s name, don’t forget to get a new Social Security card. If the name on your card doesn’t match the one on your return, your refund could be seriously delayed.
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