How to find your unknown Tax Deductions:

Posted by Bruce Mc on Sep 3, 2008 in Deductions, Form 1040 Information, Taxes | 0 comments

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First you’ll need a few things:

• Take a trip to your local IRS
• Internet connection to IRS website
• A good bit of time to spare
• Willingness to read a lot of tax material
• Glasses (if you need them)
• A comfortable sofa or chair
• An ink pen and paper
• Read on and then see if you can take any of these deductions

Now, this is what you can do to find tax deductions:

First, visit the local IRS office, with plenty of time left before they close for the day. You should see shelves full of tax forms and their instructions as well as tax publications.

Start at one end, and look at each form and publication. Does it potentially apply to you? Glance over forms, and see if you can use each one. Maybe you don’t need the one on moving expenses if you haven’t moved anywhere, but you might need the one on non-cash charitable contributions (Form 8283) if you donated some furniture to the Goodwill this past year.

Look at publications as well. Glance at the topics covered. See if any apply. Take one of each form and/or publication that might be of use to you. Make sure to get the instruction manual to any form you take. Grab a backup copy of each form for a rough draft and your records. Get out of there with your paperwork and all!

Hopefully you didn’t find that too stressful.

The alternative is to go to the IRS website, and go through each form and publication online. This might give you more information if the local office is out of something, but it may be easier to see the paperwork itself rather than browse online. Up to you. But then you have to download and print everything out yourself!

How to Find your Hidden Tax Deductions

Now, you’ve got your materials together. Start reading through each publication and instruction manual. Make 2 piles. One pile is going to be things you can’t use; the other is going to be things you can.

With the pile of things you can use, go through and highlight areas of potential deductions. Keep this all organized. You could even make an overall list that has the form number or publication name, and what potential deduction/s you found in each one.

Now, go through all of your receipts and information from the year. See what you’ve got. Take all of this information to a tax preparation professional, or do it yourself. If you do it yourself, budget lots of time for learning how to put each of these deductions onto the various forms and eventually to Form 1040 and Schedule A–Itemized Deductions!

In general, the Schedule A of Itemized Deductions is the page to start from for most types of deductions. You’ll need to read the instructions for Schedule A, instructions for Form 1040 and any other forms or publications you’ll use for your deductions. (Another good source would be Publication 17.)

How to Deductions to Get You Started

Hobby expenses can be deducted up to hobby income. In other words, if you engaged in an activity not for a profit, and made some money, any associated expenses can be deducted up to the income you received from the activity. Look at Publication 535, Business Expenses. Go to Chapter 1, Deducting Business Expenses, Not-for-Profit Activities.

You may be able to deduct expenses associated with a temporary job that lasts less than a year away from your regular place of work. This would include traveling expenses to get to the job and hotel, etc. The job must be temporary and not indefinite. Read Publication 463, Chapter 1 Travel Expenses.

Another way to find unknown deductions is to look at what’s new this year, by looking on the IRS website homepage or in the publications themselves. For instance, the standard mileage rate you can use for business mileage expenses increases most years (as it did half way thru this year).

Tip

If you don’t know the nearest IRS branch office near you, you can call for information on your telephone, or go to the IRS website to look for a local office.

Related articles

• Out From Behind the Shadows: Commonly Missed Tax Deductions (turbotax.intuit.com)