Some deductions are often overlooked

On Money

March 31, 1996|By Susan Bondy | Susan Bondy,Creators Syndicate

Now that April 15 is almost upon us, here are some deductions often overlooked by taxpayers, according to Triple Check Income Tax Service:

1.) Unreimbursed job-related expenses, including business travel, hotels, cabs and business entertainment.

2.) Business-related automobile expenses, including mileage at 30 cents a mile (note: for 1996, the business-related mileage allowance will go up to 31 cents a mile), and parking fees and tolls not incurred commuting to and from work.

3.) Job-hunting expenses incurred while searching for work in the same industry or business, even if a position was not taken.

4.) Educational expenses in your own field.

5.) Medical expenses you pay for a relative who does not qualify as a tax dependent because of income requirements.

6.) Investment costs, including toll calls or trips to a broker and subscriptions to publications related to investments.

7.) Charitable driving (at 12 cents a mile) and driving for medical needs (at 9 cents a mile).

8.) Miscellaneous itemized deductions, including dues to professional organizations, tax preparation fees, safe deposit box rentals, certain tool purchases, special clothing and supplies.

All the above deductions (except 5 and 7) are subject to the 2 percent floor of adjusted gross income.

In addition, there are two important reminders for the procrastinators in the crowd:

If you're going to wait till the last minute to mail your return, don't trust your luck to metered mail. Make sure the post mark (stamped by a U.S. post office) reads April 15 or earlier.

Although the Internal Revenue Service is offering an automatic extension to all taxpayers who will be receiving refunds from Uncle Sam and who request it, Triple Check suggests you file form 4869 anyway. Certain elections may be made only on timely filed returns. Only returns with extensions are considered as timely filed. Notes James Kelly, vice president of the firm's technical department, "If you fail to claim every single legitimate deduction, you are only wasting your own money."

You can still open a 1995 Individual Retirement Account until April 15, 1996. Even if you can no longer deduct your IRA contributions, it still pays to put money into an IRA because of the deferral of taxes on interest dividends and capital gains. And, while you're at it, why not contribute to your 1996 IRA at the same time? It's always wisest to do it at the beginning of the year. That way, the profits (interest, dividends and capital appreciation) that are earned during the year will not be subject to tax.

Susan Bondy welcomes readers' questions, but the volume of mail prevents her from answering each letter personally. Write to Ms. Bondy in care of The Sun, 501 N. Calvert St., Baltimore 21278, or at 74774,3652compuserve.com. All letters will be treated confidentially.

Pub Date: 3/31/96

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