Ask Andy: most overlooked tax deductions - Action News 5 - Memphis, Tennessee

Ask Andy: most overlooked tax deductions

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MEMPHIS, TN -

(WMC TV) - I polled my accountant, my source at the IRS, credit counselors and Kiplinger.com to come up with what we consider the most overlooked tax deductions:

*STATE SALES TAXES. Yes, you can deduct the taxes you spent on the stuff you bought. That's a really big deal in a state like Tennessee with no state income tax on wages or salaries.

You don't have to save all your receipts either. The IRS offers an online sales tax deduction calculator to figure your deduction!

*"OUT-OF-POCKET" CHARITABLE DEDUCTIONS. Not just your checks to bona fide charities and churches, but also the ingredients you used to make that casserole for the bake sale or the stamps you bought for the school fund-raiser.

* STUDENT LOAN INTEREST. Students can deduct this even if their parents paid it (as long as their parents don't deduct it, too!), up to $2,500.

* MOVING/JOB-HUNTING EXPENSES.

* CHILD CARE TAX CREDIT. "You can qualify for a tax credit worth between 20% and 35% of what you pay for child care while you work," wrote Kiplinger's Kevin McCormally. "But if your boss offers a child care reimbursement account -- which allows you to pay for the child care with pre-tax dollars -- that might be an even better deal. If you qualify for a 20% credit but are in the 25% tax bracket, for example, the reimbursement plan is the way to go."

* ENERGY TAX CREDITS. "Certain home improvements, like new windows, doors and other energy-efficient products, can take up to $500 off your taxes in the form of tax credits," said IRS spokesperson Dan Boone. "This credit is good for improvements made in 2012 and 2013.

"If you really want to go green and buy equipment that produces solar, wind or geothermal energy, the IRS offers a tax credit of up to 30 percent of the cost, including the cost of installation."

The U.S. Department of Energy tax credits and rebates page is here.

Thomas Nitzsche, media relations coordinator for ClearPoint Credit Counseling Solutions, said free tax preparation is available to those who qualify.

"For example, a single person can file their federal and state taxes totally free online if their adjusted gross income (AGI) is under $57,000," he said.

He offered these sources and their respective links:

AARP:  http://www.aarp.org/money/taxes/aarp_taxaide/

VITA free tax prep:  http://www.irs.gov/Individuals/IRS-Free-Tax-Return-Preparation-Programs

IRS free online tax software:  http://www.irs.gov/uac/Free-File:-Do-Your-Federal-Taxes-for-Free

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