Tax deductions that you should know about

Seven On Your Side
March 17, 2011 2:38:32 PM PDT
People overlook many tax breaks when they are doing their taxes. Do not be one of the millions of people who have refund regret. If you do your taxes ahead of time, you can save thousands of dollars if you are eligible for any of these tax credits.

Financial planner Alan Kahn advises his clients that they are most likely throwing money away by not researching some easy tax breaks.

Home refinancing points are often overlooked.

"You might have points of eight thousand that you're advertising over the life of the mortgage and that could literally be an eight thousand dollar deduction that you can now write off immediately," Kahn said.

You should also keep your house in mind when filing your taxes because there are several eligible tax breaks if you have done anything to your home that has made it more energy efficient.

For instance, if you have installed new windows, bought new energy star appliances, put in energy saving lighting or installed heating and cooling systems, you can claim that and get up to a $1500 tax credit.

Kahn is surprised that taxpayers miss the energy efficient tax cut each year.

"People have no idea about that and it's amazing. In addition to that, if you really wanted to go crazy and you wanted to go solar, you can get a 30 percent credit with no cap or max. There, if the cost weighs ten thousand and you get a credit of 30 percent, which equates to three thousand of your taxes." Kahn said.

Don't cry if you have missed this one. You have two years to go back and declare a 529 College Savings Plan. It's a blink from goo-goo to graduation so investing now pays off.

Many people going back to school don't realize those night and weekend classes may qualify for higher education credits or deductions. College tuition can give you a deduction of up to 4-thousand dollars.

Number five on our list, health insurance premiums. If a medical issue or hospital stay costs you 7.5 percent of your income, anything above that's usually a write off.

And don't forget to take a write off for any net investment losses. Hits you took in the stock market are deductible.

If you cleaned out your closets and gave it all to the Salvation Army, non-cash charitable donations are an often forgotten line item.

If you plan to file your taxes and you have not done so yet, it would be wise, and not to mention beneficial, to research any tax breaks that you can possibly claim on your taxes this year.