| In order to minimize your tax bill and maximize your tax | | | | stamps bought for your school fundraiser. Also, if you |
| refund, you need to make sure to take advantage of | | | | drove your car for charitable purposes, you can |
| every deduction and credit you're entitled to. To make | | | | deduct 14 cents per mile. |
| this a little easier for you, we've highlighted 5 | | | | Child Care Credit |
| deductions that most taxpayers are entitled to take, | | | | It's easy to overlook a portion of the child-care credit if |
| but often overlook when filing their tax returns. | | | | you pay your child-care bills through a reimbursement |
| State Sales Tax | | | | account at work. Only $5,000 of such expenses can |
| This deduction is especially important for those who | | | | be paid through a tax favored reimbursement account, |
| live in states that don't have a state income tax, but in | | | | but up to $6,000 for the care of two or more children |
| certain cases, can also work to the benefit of | | | | can qualify for the credit. So, if you run the maximum |
| taxpayers who are required to pay state income tax. | | | | through a plan at work, but spend even more for work |
| Either way, you must choose between deducting state | | | | related childcare, you can claim the credit on an |
| and local income taxes, or state and local sales taxes. | | | | additional $1,000. |
| If you made a large purchase such as a car, boat, | | | | State Taxes Paid Last April |
| airplane, RV or home building materials, you get to add | | | | If you owed tax when you filed your 2007 state tax |
| the state sales tax you paid to the amount shown in | | | | return, remember to include that amount with your |
| IRS tables for your state. The IRS has a calculator on | | | | state tax deduction on your 2008 return, along with |
| its web site to help you figure the deduction, which | | | | state income taxes withheld from your paychecks or |
| varies by your state and income level. If you use tax | | | | paid in quarterly estimated payments. |
| preparation software, or an online tax preparation | | | | Property Tax Deduction for Non-Itemizers |
| service, they will usually be able to calculate this for | | | | Normally, to write off property taxes, you must itemize |
| you. | | | | your deductions. But for 2008, homeowners who claim |
| Out-of-Pocket Charitable Contributions | | | | the standard deduction can also use property taxes to |
| You can write off out-of-pocket costs incurred while | | | | lower their income tax bill. If you don't itemize, you can |
| helping charitable organizations. Some examples are | | | | increase your standard deduction by $500 if you're |
| ingredients purchased to prepare a meal for a church | | | | single, or $1,000 if you're married, to account for |
| or a nonprofit organization soup kitchen, or the cost of | | | | property taxes you paid on your home in '08. |