Top 10 tax deductions you may have missed

April 13, 2009 12:00:00 AM PDT
Save money on your taxes with these often overlooked tax deductions. Melanie Donaghy, vice president of Wells Fargo Internet Services, shares her top 10 list.

Top 10 "Lesser Known" Deductions for Tax Season

1. Job Hunting
Should you be looking for a job in your field, you can deduct several different expenses like preparing and sending out your resume (i.e. stamps, envelopes).

2. Moving Fido
When relocating for a job you are also allowed to deduct any expenses associated with moving your pet(s), Fido qualifies as a personal effect.

3. Refinancing
Any points you pay when you refinance can be deducted over the life of the new loan.

4. Starting Up
If you are in the process of starting a business you are likely using money from your pocket. These costs can range from software expenses and bookkeeping materials to furniture and other various start-up related expenses.

5. Volunteering Pays
In addition to feeling good about yourself, participating in philanthropic activities allows you to deduct any associated travel costs.

6. Writing off What's Gone
If you've been unlucky enough to have had something stolen, make sure you write off the value of the item when filing in 2009.

7. Gambling
Since you're taxed when you win, it only seems fair that the government allows you to deduct your losses -- to the extent of your winnings.

8. Claiming the Folks
If you help support your parents, you may be able to claim them as dependents. Among other requirements, they cannot be making more than $3,200/year (not including Social Security).

9. Doing Your Duty
Many companies continue to pay employees full wage while on jury duty and collect the money paid for doing their civic service. Problem is the IRS still demands you report the money paid by the government as taxable income, but you can claim an offsetting deduction.

10. Spring Saving
If you owed state or local income tax when you filed your 2007 return in the spring of 2008, you can deduct that amount on your 2008 return.

Some of these deductions are available only if you itemize or are subject to restrictions.

Survey results:

  • Two-thirds of people expect to receive a refund or rebate in 2009. Most of those getting money back plan to direct their funds toward paying down debt (46%) or to savings (44%).
  • Most consumers (74%) self-identify as being financially astute.
  • Seven in ten consumers keep their tax documents and records "well organized" but this organization seems largely paper-based. Nearly half of consumers do not keep any tax-related documents in a digital format, on computers or a website.
  • Three in four consumers (73%) use some kind of software tool or web-based service to prepare and file tax returns. Among these, the most popular approach is to use tax filing software like Turbo Tax or TaxACT.
  • Just under six in ten consumers prepare all taxes themselves, without relying on professional help.
  • Consumers expect to be more timely in 2009-requests for automatic extensions are slated to decrease by five percent, compared with last year.
  • Electronic income tax filing will rise by about five percent in 2009. Among these e-filers, the majority (60%) will file their e-return themselves.
  • People who identified themselves as "nervous about filing their returns" are three times more likely to file on the last day than those who say they are not nervous (20 vs. 7 percent)

About Melanie Donaghy:
Melanie Donaghy is vice president for Wells Fargo Internet Services Group. She joined Wells Fargo in 2002 as head of marketing for Business Internet Services, the division that provided small and medium sized businesses online banking services, including domestic and international payments. During her tenure, she launched an award winning B2B e-newsletter, delivered double digit sales growth through the channel consistently for six years and launched nine new small business focused services. In 2009, Donaghy became the lead strategist for the Internet Group for Wells Fargo Insurance Inc. In her spare time, she enjoys gourmet cooking and entertaining. She was born in England.


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