30 Last-Minute Tax Tips
Tax payments are due Monday, April 18. The deadline for those with six-month filing extensions is Oct. 17. Racing to meet the April 18 deadline? Here are some last-minute tips gathered from a broad array of tax preparers.
Overlooked Deductions
- State-tax refunds for AMT taxpayers. Taxpayers often forget that state tax refunds aren't taxable to those who owe alternative minimum tax (AMT) for the same tax year, as long as the amount of the refund is less than the amount of state income tax disallowed under AMT.
- Health-insurance premiums for the self-employed. For 2010 only, people who are self-employed and have deductible health-insurance premiums may also deduct them against Social Security taxes on Schedule SE. For 2010 and after, these same taxpayers may deduct premiums for a child under age 27 at the end of the year, even if the child isn't a dependent for tax purposes.
- Moving expenses. Taxpayers who moved more than 50 miles for work and stayed employed may often deduct reasonable moving expenses. No itemization is necessary. See IRS publication 521 .
Audit Triggers
- Large charitable contributions, especially of noncash items. Taxpayers must have proof for every dollar of donation deductions, and sometimes appraisals as well. The rules are in IRS publications 526 and 561.
- Home-buyer tax credit. Congress has passed three versions of this stimulus beginning in 2008, and research by official watchdogs showed substantial fraud in the initial one. Later versions require taxpayers to provide documents proving they qualify for the break.
To read more about deductions or credits, audit triggers, tips for investors, common errors and ways to cut your tax bill, visit Smart Money.com.