Duvall & Associates, Inc.
BUSINESS ADVISOR NEWSLETTER
 

 Be on the lookout for money-saving deductions

- by Alan Duvall 

Published in Dayton Daily News  February 18, 2007 

“Brilliant deduction Watson.”  Sherlock Holmes 

Tax filing season is in full swing so guidance as to potential treasures is offered to help ease the trauma. 

All taxpayers are eligible for a new telephone credit based upon 3% excise taxes paid on long-distance or bundled services from March 2003 to July 2006.  The credit is relatively small despite reports some individuals have wrongfully claimed more than $30,000. 

Automobile deductions are often omitted from returns, particularly trips for medical (18 cents per mile) and charitable (14 cents per mile) purposes.  Business mileage is deductible at the greater of actual expenses or 44.5 cents per mile. 

The cost of parking fees and tolls may be added to mileage expenses. Expenses not reimbursed for job hunting and moving may be deductible even if the job search is not successful.  Eligible expenses include travel expenses to investigate the area.  Miscellaneous job-related education, union dues and teacher classroom expenses are deductible subject to limits. 

Ohio and federal tax benefits may be extracted from medical, nursing home and health plan payments.       

Individuals who have acquired new homes or refinanced existing properties should search closing statements for loan “points” or real estate tax deductions.  Here's a tip to keep in mind down the road: qualified mortgage insurance may be deductible for loans closed after 2006. 

Dependents provide savings in the form of child credits, exemption deductions, child care deductions (federal & Ohio), head of household filing status and earned income credit.  Family education expenses may be eligible for federal tax credits and student interest deduction as well as Ohio 529 Plan and state tuition deductions.      

Certain IRA and pension payments can be deducted for 2006 even if made by April 17.  Individuals over 50 may be eligible for supplementary retirement contributions. 

Couples should explore married filing separate status and pay close attention to Ohio results. 

Individuals living in non-taxing districts, but employed in taxing-cities, may apply for city refunds if some work was conducted outside any city limits. 

The tax filing deadline has been extended to April 17 this year proving - of life’s two certainties - only taxes can give you an automatic extension.

Alan Duvall is a certified public accountant in Dayton.  Contact him at Alan@Duvallcpa.com.