Taxpayers are supremely busy nowadays. The last date to file tax returns is April 15, 2013. Most taxpayers go for the standard tax deductions to file their returns hurriedly. However, what they forget is that they can get greater tax refunds by itemizing tax deductions.
The IRS has set standard tax deductions so as to help you slash your taxable income when you're unable to get additional deductions through itemizing. The standard deduction amount for the financial year 2012 is $8,700 when you're the head of the family. In case you're single, then the standard deduction amount is $5,950. In case you're married and filing jointly, then your maximum deduction amount will be $11,900.
You must have understood from the figures that standard deductions can help you save on your taxes. Nevertheless, if you're able to take out some time from your busy schedule, then it would be better if you collect all your payment receipts. You never know, you can attempt to get more money on your tax refunds.
Check out the 6 tax deductions that you should be aware of:
1. Property tax on vehicle registration: Have you paid personal property tax for vehicle registration on the basis of its market value? If yes, then you can deduct the expense from your taxable income.
2. Fees paid for filing your tax returns: If you've used any application and spent money on it to file your income tax returns, then you can take advantage of deduction.
3. Losses incurred due to natural disaster: Did you lose more than 10 percent of your income due to Hurricane Sandy in the last year? Well, you may not be able to recover your total loss, but the IRS can give some relief to you. You can deduct your loss and get a bigger tax refund.
4. Amount donated to charitable organizations: In case you've donated your clothes and other items to a charitable organization recognized by the IRS, then you can deduct an amount from your taxable income. The amount will depend upon the market price of the clothes and the other items. If you did some volunteer work at some charitable organizations, then also you'll be able to deduct your travel expenditures from your taxes.
5. Expenses incurred on health care: If you’ve spent money for the health related issues of yourself, your partner, your dependents, then you may be able to deduct expenses (made to detect, treat, lessen or stop a disease) only if they exceed 7.5 percent of AGI or adjusted gross income. For instance: if your adjusted gross income is around $60,000, then you'll be able to deduct expenses that are more than $4500. In the financial year 2013, the percentage will rise to approximately 10 percent.
6. Employee related expenses: You can qualify for tax deductions if for the un-reimbursed employment related expenses. If you were not reimbursed for the travel related expenses and for attending seminars, then you can try to get tax deductions. Make you sure you itemize deduction only if your expenses were 2 percent of adjusted gross income.
Finally, if your employer withheld a portion of your paycheck for the local and state income taxes, then you can itemize to take advantage of this deduction. If you've paid previous year's state and local income taxes during 2012, then also you can qualify for deduction.