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Standard Tax Deduction
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Last Minute Tax Tip: Quick Deduction Calculation
The deadline for filing your tax return is tomorrow, April 15. You haven't time to spare toying with elaborate calculations, so use this simple test to determine whether you should take the standard tax deduction or itemize your deductions.
Bob Scharin, senior tax analyst from Thomson Reuters' Tax & Accounting business, recommends concentrating on four figures: mortgage interest, real estate taxes, and the amount of state and local tax withheld (if your state doesn't have income tax, substitute the sales tax deduction amount found on the IRS website).
Definition: Standard Deduction
If you're not someone who itemizes deductions on her tax return, then your other option is the standard deduction. Itemized deductions require that you've kept track of deductible expenses throughout the year, and many of us don't have expenses that would add up to more than the standard deduction, anyway.
Standard deductions (as with the itemized kind) reduce your adjusted gross income, and the amount of your allotted deduction is based on your filing status.
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Tax Breaks For 20-Somethings
Graduating from college comes with a slew of mixed emotions and a world of opportunities, including some that may not have crossed your mind. Kiplinger's June 2008 issue recognizes that tax breaks aren't part of most students' college curriculum and rounded up all the tax breaks it could think of for newly graduated 20-somethings.
- Moving expenses: New grads can deduct the cost of moving themselves and their belongings to their first job out of school, as long as the job is at least 50 miles from their old residence.
- Saver's credit: Depending on their income, some young adults can trim their tax bill by up to $1,000 as a reward for contributing to an IRA, 401(k) or other retirement plan.
How Money Are You: Deducting Job Hunting Expenses
If you're itemizing rather than opting for the standard tax deduction, don't miss out on listing expenses that came about because of your job hunt. Do you know what aspects of pounding the pavement could be considered tax deductions? Take the quiz!
Savvy ATM: Sorting Out Credit Card Rewards
While it may seem that credit cards lead an innocent existence with the purpose of getting you out of a bind, credit cards companies are not here to help you. That's not to say you can't outsmart them, but CNN Money goes as far to say that rewards programs are in place to entice consumers to charge more on their credit cards and are ridden with traps. A Consumer Reports study released this week noted that rewards programs are not only frustratingly useless for the most part, but the confusing rules and restrictions make most reward cards a waste of time.
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