Lesser-Known Tax Deductions

As the US tax filing deadline approaches, the Texas Society of CPAs has put out a list of some of the most commonly missed deductions. Here is their run-down:

CHARITABLE CONTRIBUTIONS

Most people know that cash charitable contributions can be deducted as an itemized deduction. But not everyone realizes that you can deduct the fair market value of non-cash donations, such as used clothing, furniture, and household goods.

IRA CONTRIBUTIONS

Contributions to a traditional IRA might be deductible, depending on your age, total income, and whether you are covered by a retirement plan through your employer.

HEALTH INSURANCE FOR SELF-EMPLOYED WORKERS

Premiums you pay to cover yourself and your family are 100 percent deductible as an adjustment to gross income.

EARLY WITHDRAWAL PENALTY

If you incurred a penalty as the result of an early withdrawal from a certificate of deposit or other type of time deposit savings account, the amount of the penalty is deductible as an adjustment to gross income.

SOCIAL SECURITY TAXES FOR THE SELF-EMPLOYED

In computing your adjusted gross income, you can deduct up to one half of self-employment taxes paid during 2008.

HOME EQUITY LOAN INTEREST

You can deduct interest payments on up to $100,000 of home equity loan debt.

MILITARY RESERVISTS

Reservists who serve more than 100 miles from home and stay overnight are eligible to deduct non-reimbursed travel expenses.

ALIMONY

Divorced taxpayers may write off alimony expenses as an adjustment to gross income, but not child support.

(photo credit: Newscom)