More Easily Missed Tax Breaks
Sunday, February 12, 2012 at 08:03AM The good news is that I found so many examples of often overlooked deductions that this turned into a 3 part post. The bad news is those at the bottom of the list are less compelling. Still, they may come in handy for a game of Trivial Pursuit. Or you could answer a question on Quora.
If you are one of the lucky folks who did a refi in the past few years and you paid points, you are eligible for more than just a lower mortgage payment. You can take the points divided by the term of the loan. So if it’s a 15 year loan, that’s 1/15th of the points each year. Not much, but not nothing either. Also if you pay off the loan, you get to take the remainder.
Most employers continue to pay your salary if you go on jury duty, but many of them also take the “pay” you get from going. If you fall into that particular pool, you can take the jury compensation you didn’t get as a deduction. This is another “above the line” chance to reduce adjusted gross income. One reason this gets overlooked is there’s no line on your 1040 marked jury duty pay. You take it at the end of the section for deductions before you calculate adjusted gross income.
My next tip isn’t actually a deduction, but in the year where enhanced brokerage reporting starts to kick in it’s worth noting. You pay taxes on reinvested dividend income, but many people forget to add this to their basis cost when stock is sold. Adding that little bit extra either reduces taxes owed for gains or increases the loss you can put towards gains on your tax return.
Finally, don’t overlook that Uncle Sam is giving you a little extra time this year. Individual and partnership returns aren’t due until April 17th. Corporations don’t get a break -- they’re still due on the ides of March. Remember if you file an extension it gives you more time to finish the return, but you still have to pay taxes you owe by the initial deadline.