This little guide shed shed some light on a topic that is infamously vague. One could say it is done on purpose. I've said it before and I'll say it again, knowledge is power when it comes to the U.S Government and you money. We have to sometimes fight tooth and nail to hold on to every cent.
A quick overview of key tax deductions:
Remember, significant savings can be had when tax breaks are combined.
Home owner deductions - This includes mortgage interest, property taxes, mortgage points, and PMI premiums.
Traditional IRA Contributions - Your deduction depends on your income, coupled with whether or not you have a sponsored retirement plan with an employer.
Donations - This one is dead simple, cash and non-cash contributions count.
Medical Expenses - This is if expenses exceed 10% of you adjusted gross income.
Moving Expenses - Yes, this too, say you move for a job that increases your commute by 50 miles or so, this can be deducted.
Job search costs - If the costs exceed 2% of your gross income while you're searching for a job. This doesn't count for newbie job seekers.
Student loan interest - It cancels out at higher income brackets, but it's a good one if you can get it.
Earned Income - According to the article, this one could be worth up to $6,318, depending on how many children you have in your household.
Child Tax Credit - This one could be worth up to $1,000 per child under 17.
Child and Dependent Credit - This gives higher earners who pay for child care a piece of their costs back.
American Opportunity Tax Credit - This one is worth up to $2,500 per student in your household who has higher education expenses.
Lifetime Learning Credit - This one is worth up to $2,000 per student.
Saver's Credit - Worth up to $2,000 per filer for contributing money to a retirement savings account.
Don't get discouraged by the mountains of information out there. According to the IRS, 20% of American tax payers miss out on a tax break worth up to $6,269. Now that is something to think about.