4 Expensive Tax Mistakes
Raise your hand if you want to pay extra taxes. Yup, that's what I thought -- even the IRS says that you shouldn't pay more taxes than you must. Yet taxpayers make expensive mistakes year after year and end up overpaying both their income taxes and their investing taxes. Once you've read through this list, you'll be equipped to do better than the average taxpayer at keeping your taxes to a minimum.
When you prepare your federal tax return, you have the choice of either claiming the standard deduction or adding up all the "itemized" deductions you qualify to take and claiming those instead. To get an idea of what qualifies as an itemized deduction, pull up a blank copy of Schedule A. This IRS form is essentially an itemized deduction cheat sheet: it's a list of the largest and most common of these deductions. Run through this list and note any deductions you could claim, then do a rough estimate of how much the total would be. If it's higher than your standard deduction, go for it.
This may be the last year that itemized deductions are a good choice for most taxpayers, so take advantage of them while you can. Itemizing won't be the best option for everyone, but if you don't at least add up the numbers and make the comparison, you could be giving a lot of extra money to the IRS.
Source: Fool.com
