You Can Cut Your Income Tax Bill.

• Author: Schnepper, Jeff A.
• Position: Income tax deductions - Brief Article

YEAR AFTER YEAR, thousands of people pay too much in taxes by failing to take all their deductions. The following are some of the most commonly missed ones:

Pay off any credit card debt with a home equity loan. The interest on that loan is deductible. Home equity debt is any debt secured by your house. It doesn't matter whether you borrow from your bank, 401(k), or neighborhood loan shark. The only key to deductibility is to secure the loan with your house. The money can be used to pay off your credit card debt, for vacations, or anything else you want. The interest on up to $100,000 of debt is deductible as home equity interest.

Contribute old clothes, furniture, and other items to a charity. If you contribute cash to a charity, you get a deduction. You can deduct the wholesale fair market value of non-cash contributions to your church or synagogue, Goodwill Industries, or any other qualified charitable organization. Moreover, you can deduct your mileage at a rate of 14 cents a mile if you use your car for charitable purposes. Make sure that you get a receipt. It usually just will say something like three bags of clothes without any value given, but don't leave without one. Think of that receipt as green paper with pictures of dead presidents. If you are in the 28% bracket, a $1,000 contribution of old clothes means $280 in your pocket. You wouldn't walk out of a store without your change, so don't forget your receipt.

Find that perfect job and let the IRS subsidize your search. Job-hunting expenses are deductible. If you are out of work, or even if you still are employed and looking for a new job, all of the expenses incurred are deductible as miscellaneous itemized deductions. These include--but are not limited try--resumes, phone calls, postage, and travel costs. (You can deduct 32.5 cents per mile for the use of your car.) For example, if you take a friend to lunch in an attempt to use him as a reference or referral, you can deduct the cost of the meal as a job-hunting expense.

Keep up with your investment expenses. These are allowed as miscellaneous deductions. Such expenses would include investment publications, payment for investment advice, calls to your broker, and any other expense related to the production of investment income. Rather than buy your investment newspapers and magazines at the newsstand, subscribe to them and use your check as the receipt. If you utilize your computer or subscribe to an Internet service for...