Work and Business Deductions and Adjustments for Your 2010 Taxes
Like a train barreling down the tracks, April 15th is fast approaching. A few weeks ago, I told you about 5 changes to the tax code you should know about, and this morning I have some more tax tips for you -- a slew of work and business related deductions that you (or your tax consultant) might not be aware of.
Making Word Pay credit. Remember the Obama stimulus act? It might pay to. This debuted in 2009, but you can still claim it in 2010. It's a refundable credit worth up to 6.2 percent of earned income, and translates to $400 for single taxpayers or $800 for married taxpayers filing jointly. The details are on Schedule M. The value of this credit is reduced if your adjusted gross income is more than $75,000 (or $150,000 married filing jointly).
Job search expenses. Under the heading of Miscellaneous Itemized Deductions lies the ability to claim expenses associated with job hunting. That's phone calls, travel, postage, and more. For these to help your bottom line, though, all Miscellaneous Itemized Deductions must add up to 2 percent or more of your adjusted gross income.
Moving expenses. Did you just move to take a new job? If that move was more than 50 miles, you can claim the costs (including transportation of your household goods, mileage for your car, and lodging along the way). The details are on Form 3903.
Reservist expenses. Are you a Reservist in the Armed Forces? If so, you can claim expenses for travel associated with your service (on Form 2106). Even better, you don't need to itemize or to exceed 2 percent of your adjusted gross income.
Health insurance for the self-employed. Health insurance for the self-employed costs a fortune. That's why this deduction is so welcomed. And this is a little confusing, so stay with me: Traditionally, you could reduce your adjusted gross income by some percentage of your health insurance premium. Now, you may also reduce your self-employment income as well. The bottom line: Not only is your income tax reduced, but so is your self-employment tax.
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