If using a tax professional or preparing their return personally, many taxpayers may be forgetting some deductions and credits that could save them more money, according to CCH. The company, which is part of Wolters Kluwer, is a provider of tax, accounting and audit information, software and services.
"Whether you hire a tax professional or file your own return, the preparer needs to know what expenses you've incurred and donations you've made to see if you're entitled to additional deductions," said Mark Luscombe, JD, LLM, CPA and CCH Principal Federal Tax Analyst. "Some taxpayers may already be lowering their overall tax bill and not even realizing it."
Deductions Often Missed
Medical Expenses – Having to pay income taxes in a year where you also incurred significant medical bills can be especially tough. But some of those medical costs could come off your taxes, depending on how much you paid compared to how much you earned. Luscombe explains more in this video clip: Overlooked Deductions/Medical Expenses.
Gambling Losses – Yes, there may be a silver lining when it comes to money you may have lost in the casino, at the track or on other legal wagers that didn't go your way. Luscombe explains in this video clip: Overlooked Deductions/Gambling Losses.
Charitable Contributions – Are you counting every donation made to qualified charities or other non-profit 501(c)(3) organizations? Luscombe explains what other donations and expenses may earn you an additional tax deduction in this video clip: Overlooked Deductions/Charitable Contributions.
If you're eligible, one above-the-line deduction on Form 1040 or 1040A that may generate tax savings relates to contributions made to an Individual Retirement Account (IRA). The maximum deduction for an IRA is $5,000 for 2012 or $6,000 for individuals 50 and older making a catch-up contribution. For 2012, the deduction begins to phase out at adjusted gross income (AGI) levels above $58,000 ($92,000 for joint filers) and is not available to taxpayers with AGI above $68,000 ($112,000).
Individuals have until April 15, 2013, to make contributions to their IRAs that apply to 2012 tax returns.