25 Tips for Avoiding an Audit This Tax Season
1. Standard Deduction
Even if you don’t have enough itemized deductions, you still get the standard deductions. For 2014, single filers deduct $6,200 from earned income, married couples filing jointly deduct $12,400, and heads of households deduct $9,100.
2. Mortgage Insurance Premiums Deducted
If you itemize, you may be able to deduct your private mortgage insurance (PMI) premiums paid on your home in 2014.
3. Tuition and Fees Deduction
Regardless of whether you take the standard deduction or itemize, you can deduct up to $4,000 in qualifying tuition and fees paid in 2014. Just remember you can’t deduct the same expenses claimed for an education credit or another tax break.
4. State and Local Sales Tax
You have the option of deducting either your state and local income taxes or state and local general sales taxes paid if itemizing deductions. If you live in a non-income taxing state, deduct state and local sales taxes paid.
5. Cash Donations
If you itemize deductions, you can deduct cash donations to IRS-approved charities. You should receive an acknowledgment from organizations for donations of $250 or more.
6. Non-Cash Donations
If you itemize, you can claim the fair-market value (FMV) of donated clothing and household items. Track your donations, take photos of donated items, and store receipts with Donation Assistant® by TaxACT, a free app with over 1,300 audit-backed FMVs.
7. Donating Your Time and Talents
If you itemize, you can deduct non-reimbursed expenses for charity work. For instance, you can deduct the use of your car or other vehicle for charitable travel at the standard mileage rate of 14 cents per mile for 2014, plus parking and tolls.
8. Student Loan Interest
Up to $2,500 of student loan interest paid in 2014 is deductible, regardless of whether you itemize.
9. Job Search Expenses
If you itemize, you can deduct expenses incurred while searching for a job in the same line of work as your current or most recent job. Expenses may include transportation (56 cents per mile, parking, tolls, cab fare), employment agency fees, and costs to print and mail resumes.
10. Moving Expenses
If you meet the IRS distance and time tests, you can deduct many expenses incurred when moving for a new job. Qualified expenses include the cost of moving your belongings and travel to your new home (23.5 cents per mile, parking, tolls, lodging). Be sure to keep detailed records and receipts.
11. Military Reserves Travel Expenses
If you travel more than 100 miles from home for service, you can deduct non-reimbursed travel expenses. Those can include mileage, meals and lodging.
12. Medical and Dental Expenses
You can deduct medical and dental expenses for you, your spouse and your dependents after your total medical expenses exceed 10 percent of your adjusted gross income (AGI). If you or your spouse are age 65 or older, you can deduct total medical expenses that exceed 7.5 percent of your AGI.
13. Social Security Taxes Paid by Self-Employed Filers
If you’re self-employed, you can deduct the 7.65 percent Social Security and Medicare taxes you pay on income.
14. Tax Preparation Fees
Whether you did your own taxes or paid someone to do them last year, you can deduct the fees as a miscellaneous deduction if you itemize. Costs can include tax return preparation and electronic filing fees.
15. Mortgage Interest
If you itemize, you can deduct the interest paid on your mortgage.
16. Mortgage Points
If you itemize, you might be able to deduct the points you paid on your main home.
17. Points Paid on Home Improvement Loans
If you itemize, you might be able to deduct points paid on a loan to improve your main home.
18. State and Local Real Estate Taxes
If you itemize, you might be able to deduct any state or local tax levied for the general public welfare.
19. Business Use of Your Home
You can deduct certain expenses for business use of a part of your home that’s used exclusively and regularly as your principal place of business. Expenses may include business portion of real estate taxes, mortgage interest or rent, utilities, repairs, maintenance, and insurance.
20. Business Use of Your Car
If you use your car for your job or business, you might be able to deduct the costs incurred for business use. You can either use the standard mileage rate (56 cents per mile for 2014) or the actual expense method.
21. Business Travel Expenses
You might be able to deduct certain non-reimbursed costs while traveling for your business, profession or job. Costs may include transportation, baggage fees, meals, lodging and laundry.
22. Education Expenses
The education must relate to your present job and it must be necessary to maintain or improve your job skills or be required by your employer or by law. Expenses may include tuition, books, transportation and travel.
23. Employee Business Expenses
If you itemize, some local transportation costs are deductible, as well as certain non-reimbursed business entertainment expenses.
24. Appraisal Fees
Appraisal fees for determining a casualty loss or the value of donated property can be claimed as an itemized deduction.
25. Be Honest
If you forgot to report information on your return, file an amended return. The IRS doesn’t mind. Just remember you can only print and mail Form 1040X for amended returns.
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