The Seven Deadly Tax Sins: Commonly Missed Deductions

It's that time again, the April 15 tax deadline isincomes limits ($80,000 single, $160,000 married
looming large. If youre like most people, youfiling jointly) the deduction is limited to $2,000 for
havent gathered all of your tax records, let alone2004. This deduction must be coordinated with
filled your return.Before you dig in and getother education credits and savings
started, take this opportunity to first review a listvehicles.Work-Related Expenses: You can write
of a few tax deductions to which you may beoff many work-related and work-search
entitled if you itemize deductions but most peopleexpenses, such as education that maintains or
overlook. Many of these deductions are subjectimproves your skills, certain business tools, dues
to various limitations, so consider gettingto labor unions, cell phone depreciation, certain
professional help from your tax advisor andexpenses to search for job in your present
accountant to determine which deductions youoccupation, including employment agency fees,
qualify for and which items apply to your specificresum preparation, and travel expenses (local and
circumstances. Remember, there are hundreds ofout of town) and cleaning and laundry bills when
deductions throughout the tax laws; many ofon a business trip. Work-related expenses are
them can be quite obscure but also quite lucrative.subject to the 2% floor on miscellaneous
Here are seven commonly missed deductions todeductions. Furthermore, if you buy a new SUV
keep top of mind:Points on Refinancing: Withfor business use that weighs more 6,000 pounds,
interest rates so low in 2003, there was a greatand file Schedule C or other business tax return
deal of refinancing activity. Any points you pay toyou may be allowed to write off the full amount
refinance your home can be deducted ratably(up to $102,000 in 2004) in one year as a
over the life of the new loan. Furthermore, allbusiness expense subject to limitations.Clean-Fuel
unamortized points on old refinancing areDeduction: If you are not in the market for a
deducted in the year of the new refinancing.Healthlarge SUV for business, you still can get a
Insurance Premiums: Any health insurancededuction for your personal car, another
premiums you pay, including some long-term careabove-the-line deduction of up to $2,000 for 2003
premiums based on your age, are potentially($1,500 for 2004) of the cost of buying a
deductible. Medical expenses have to reach 7.5%clean-fuel vehicle or a car that uses a significant
of your adjusted gross income before they givesource of energy other than gasoline. That
you any tax benefit. Self-employed people canincludes hybrid cars, such as the Toyota Prius, the
deduct 100% of health insurance premiums paidHonda Insight and the Honda Civic Hybrid. You get
for themselves, their spouses and theirthe deduction in the year you start using the car,
dependents.Non-Cash Charitable Contributions: Ifand you must be the original owner.Investment
you have used your charge card for contributionsand Tax Expenses: In addition to forgetting to
to charity, remember that the deduction isdeduct tax-preparation fees and the portion of
allowed in the year that you made the charge,your legal, accounting or financial planner fees that
not when you actually pay the bill. Also, you mayrelate to tax planning, many people miss deducting
write off certain out-of-pocket expenses relatedinvestment expenses. Those include certain fees
to charitable activities. Appraisal fees paid to valuepaid to your financial advisor and/or broker and
property donated to charities may be taken as acertain IRA fees you may pay directly. It also
miscellaneous deduction subject to the 2% floormay include mileage for meetings and
on miscellaneous deductions.Higher-Educationlong-distance phone calls to your advisor or
Expenses: If your adjusted gross income wasntbroker. Dont forget to include deductions for the
more than $65,000 ($130,000 for married, filingcost of your investment publications or
jointly) in 2003, you can get an above-the-linesubscriptions, safe deposit boxes used for
deduction for as much as $3,000 for anyinvestment-related documents, these deductions
higher-education tuition and fee expense you paid.are subject to the 2% floor on miscellaneous
For 2004, the deduction can be as much asdeductions.
$4,000. For those at higher adjusted gross