Saving on Your Federal Tax Return: Things Some of You Didn't Know

Did you know you can reduce your tax a great deal on your federal tax return? There are so many ways to save on income taxes and so many that don't know about it. This article has been written so that you can save on your taxes and get a little extra cash back when tax time rolls around. It will save you money throughout the year as well. Here are a few ideas and tips to keep in mind all year long.

Keep Your Receipts - I can't express this enough. Anything you buy you pay taxes on. Get yourself a shoe box or some sort of box or envelope to keep your receipts in for a month. At the end of each month go through your receipts and organize them into categories. These categories being: work related expenses, household repairs and updates, home office supplies, vehicle repairs, school expenses and supplies (for you and/or your children), child care expenses, major purchases (car, house, etc), charity donations, legal expenses, medical insurance, medical expenses and misc items.

Make yourself a spreadsheet of some sort. You can do this in Microsoft Word (or any program like this) or you can just get a piece of paper and do it yourself. You will need a sheet for each category. Make the following columns in the top row: Items - Date - Expense - Tax Paid. Take your receipt and fill in each column. When you are finished for that sheet, add up total expense and write it in the column under total expense. Add up tax paid for each item and add it in the column under tax paid. Do this for each page until you are finished. Create yourself a tax folder and insert these sheets into them. When you are all finished with this, get yourself a separate shoe box or envelope to store the receipts in so that you can use the box/envelope for the next months receipts.

Deductions You May Be Able to Take on Your Federal Tax

Child and Dependent Care - Did you pay someone to care for your child (disabled spouse or dependent) while you worked/actively searched for work or went to school? To qualify for this credit: Your child/dependent must be 12 or under or mentally/physically disabled. The child/dependent must have lived with you for more than half the year. You will need the name and social security number/tax ID number of the care provider.

Student Loan Interest - Did you pay any student loan interest for you, your spouse or a dependent (the loan must have been taken out when they were your dependent)? The student who used the loan must have been enrolled at least as a half-time student enrolled in a degree or certificate program. The student loan must have been used towards tuition, fees, board, books and supplies. You will receive form 1098-E for any student loan interest paid in the year you are filing. Keep this in your tax folder for your records.

IRA Deduction - Did you contribute to an IRA? You may be eligible to receive a deduction. You must have made a regular contribution to a Roth or traditional IRA. A rollover or transfer does not count towards this deduction. You must be under the age of 70.5 at the end of the year. You must have earned or self employment income for the year you are filing. Save any paperwork you receive on your IRA stating that you have made a payment. This is sometimes in your check stubs or given to you at the time of payment.

Educator Expenses - This is not the same as education expenses. You must teach (or are you a counselor or principal) K-12^th grade and teach in a public school to take this deductions. Do you pay out of pocket for any of your books, supplies and other materials for your classroom? You must have worked 900 hours during that school year to take this deduction. Keep your receipts for these items and on each receipt note the reason you bought the items.

Property Tax Deduction - Did you pay property taxes on a house YOU own or taxes on closing a house YOU sold? You will receive a closing statement or form 1099-S. Save these for your records with your other tax information.

Moving Expenses - Did you move for a new job or because of a job transfer? You may be able to deduct your moving expenses. You must be a full time employee. Your new job must be at least 50 miles away from your previous home and your previous job. You can deduct the cost of storing your property, travel, lodging and the cost of the move. Keep your receipts and mileage logs for your move.

These are just some of the deductions you can take on your taxes. I have explained a few details to them and I hope this will help you out when filing your taxes.