Tax Deductions 2010 - Are You Getting as Much Money Back as You Should Be?

There's no such thing as an IRS audit for the purpose of identifying deductions that taxpayers miss (don't we wish?!). It's also extremely common for people to submit their tax return having no idea that they've missed important deductions and left a substantial amount of money on the table.

Professional tax preparers hear over and over again, "Really? I can deduct that?On top of that, every tax season there a changes to deductions that a majority of people simply are not aware of.

The year 2010 was a big one for tax law changes. Not only were there numerous changes to tax deductions in 2010, but by the end of the year some of the earlier changes were changed again. It can be almost overwhelming for the average person to keep up. But, not doing so can result in too much tax being paid because not all applicable deductions were taken.

Although the tax deduction changes in 2010 are too many to cover here, the following are some of the most important deduction change for 2010 returns.

One of the most significant changes in IRS deductions applies to the First Time Homebuyer Credit. It is different from the Homebuyer's Credit of 2009. The one in 2009 had to be repaid; the one in 2010 does not have to be repaid if you live in the house for the requisite amount of time. The 2010 version of the law also includes a credit available for repeat homebuyers, not just first time homebuyers. The IRS does require certain closing documents for taxpayers to claim the credit.

There are numerous professional expenses that many taxpayers can deduct. Many travel and transportation expenses can be deducted, too. And, military personnel qualify for any number of special deductions.

Many deductions set to expire after 2009 were extended until the end of 2011 so they still apply in 2010. These include the State and Local Sales Tax Deduction, Qualified Tuition Expenses, Teacher Classroom Expenses, and IRA Distribution to Charity. Changes were also made to the Alternative Minimum Tax to prevent middle class taxpayers from paying it.

Looking into 2011, there were changes to the Standard Mileage Rate for deducting up to four automobiles. There were also changes to the Moving Rate and Medical Travel. Cell phone record keeping requirements have been revised. The American Opportunity Credit was extended and energy credits have changed.

Although it can seem overwhelming to stay abreast of all the tax law changes and deductions, doing so can almost certainly save taxpayers a substantial amount of money each year. Although you may use a professional tax preparer, or rely on a software program to do your taxes, it is still important for taxpayers to have a clear understanding about which tax deductions may apply.

Taking time to stay informed can make the difference between getting a smaller refund than you would otherwise be entitled, or paying in far more than you would need to pay if all applicable deductions had been claimed.

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