Make sure to take note of available tax deductions
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Americans claim more than $1 trillion worth of deductions at tax time. And whether you think the tax code should have more write-offs or fewer loopholes, you might as well get your piece of that pie while it's on the table.
That means grabbing every available deduction, even the ones you may not have thought about. Here's a helpful starter list for your 2012 returns.
Taxes on your new car. If you blinked at year-end, you might have missed the revival of the state sales tax write-off, which lets taxpayers choose between deducting state income taxes or state sales taxes. In high-tax states such as New York or California, it may be worthwhile for retirees who shelled out for something big, such as a boat or a car.
Supplies you sent to Sandy victims. You probably already keep track of the money you donate to your favorite causes. You can also write off food you bought for a homeless shelter, pens you donated to an after-school program and the like. And if you drove your car for charity in 2012, you get to deduct that, too, at a current rate of 14 cents per mile. If you scoured your closets for clothes to send to superstorm Sandy victims, don't undervalue them. Use software such as ItsDeductible from Intuit Inc. to come up with the value.
Those crushing student loans. You're allowed to write off up to $2,500 a year in student loan interest, and you can claim it even if you don't itemize your deductions, though there are income limitations. If you paid extra in an effort to pay down the loan faster, you can deduct the interest portions of those voluntary payments, too.
Breast pumps and acupuncture. The IRS has a much more lenient description of medical costs than your health insurer probably does. Lots of expenses, including breast pumps and their accessories, eyeglasses, hearing aids, acupuncture treatments and weight-loss programs are often deductible. So is the travel to your doctor's appointments.
Mom's care. Families with children get to count their kids as dependents (the exemption is worth $3,800) and take the child tax credit ($1,000 per dependent child under the age of 17). If you have kids, you probably are well aware of that. You may not realize that you may be able to count your aging parents (or other relatives) as dependents as well.
The high-end LinkedIn subscription. Job switchers, take heart: You can deduct the costs of preparing your résumé, traveling to interviews, outplacement fees and other job-hunting necessities. And if you take a job at least 50 miles away, you can write off the cost of that move.
Investment advice. Fees for financial advisers are deductible. So is the cost of traveling to meet with your financial guru in person, and subscriptions for financial publications.
Housing bubble fallout. If you struggled through negotiations with your lender last year that resulted in part or all of your mortgage debt being forgiven, you don't have to report that amount as income, as long as it was for your primary home. And you can also deduct private mortgage insurance.
Don't forget that you have until April 15 to sock away $5,000, ($6,000 if you're 50 or older) into an IRA. Depending on your income and work situation, this might be a deductible IRA or a Roth IRA. Whether you get a tax break now or later, in a couple of decades you'll probably be happy you remembered this one.