• Interest on your mortgage. Let’s be honest–interest is pretty much all you’re paying for in the first few years of owning your home.  Of course, I doubt there’s even a chance you’d let this deduction slip by, so just consider it a friendly reminder and something to look forward to when preparing your taxes.
• Health insurance premiums and Health Savings Accounts (HSAs). This might not increase your tax return significantly, but it sure feels good to be able to deduct some of those expensive premiums we all have to pay for health care, particularly if you’re self-employed.  (Hint: if you are self-employed, you get to deduct more than the rest of us.)
• Student loan interest. That’s right.  Uncle Sam lets you deduct this one, too.  You should receive a statement from your bank come tax time to help you with this part, so be sure not to toss it aside or let it get lost!
• IRA contributions. This only applies to traditional IRAs.  You’re going to have to pay taxes on your withdrawals when you reach retirement age, so prior to that point in time, you get to deduct your contributions.  If you have a Roth, you don’t get to deduct, but you won’t have to pay any taxes on your withdrawals.
• Your home office. If you’re self-employed, don’t overlook this deduction.  However, do check into the specific restrictions to make sure you qualify.  For example, a room in your home that is purely used for your business counts as a home office.  Using the computer in the corner of your bedroom does not.  Once you’re certain you qualify, you can deduct not only the space itself, the mortgage/rent payment respective to it, electricity, etc., but you can also deduct your computer, business phone line, office supplies, etc.
• Charitable contributions. You probably already know this one, but did you know that it’s not just for monetary contributions anymore?  Did you donate some old clothes or used items to a place like Goodwill or your local church?  These can be deducted.  It’s best if you make sure to get some form of a receipt if possible.
• “Green” credit. If you recently renovated your home to be more energy-efficient and “green” or perhaps bought a qualifying fuel-saving, hybrid, or otherwise “green” car, the government will reward you with a tax deduction.

If you’re uncertain as to whether or not you qualify for these or any other deductions that you find, don’t be afraid to consult a tax advisor—you can deduct tax preparation services, too!  Home tax software such as TurboTax will help you catch deductions by asking you easy-to-follow questions.

• Home office.  That’s right—you can deduct the portion of your house that you do your work in.  However, be aware that there are some tight restrictions surrounding this one.  The most notable is that this space must be solely used for your business.  The corner of your bedroom where you’re keeping the computer doesn’t count.  Once you’re down to the right specifications, you can deduct everything that goes into maintaining that space: mortgage or rent, insurance, electricity, etc.
• Office supplies and furniture. What good is a home office without a chair, desk, filing cabinet, paper, pens, and post-it notes?  Yes, this is all deductible.  It’s necessary to keep your business running!
• Phone and internet service.  If you’re able to show proof that you’re making business-related phone calls and doing business-related internet searches/emails, etc., this can be written off, too.  The key?  You may need to get a separate phone line.  And unless you’re advertising your business on Facebook, try to keep away during your “business hours.”
• Mileage.  Does your home based business require some travel?  Make sure to keep strict logs of your mileage and toll fees, as well as your destinations and the reasons for going there.  If you’re as diligent as the government requires, this can be an easy write-off.
• Travel, meals, and entertainment. If you’re traveling far for your business, you can deduct any of these expenses–your hotel, your lunches and dinners with clients, etc.  You might not have a direct boss to reimburse you when you return, but the IRS will allow you to write it off come tax season!
• Health insurance. We all know this one can be outrageously expensive when you’re paying for it with no help from an employer, but actually, this can be deducted as well for a little relief.
• Advertising/Promotions. Any expenses toward building your business may be eligible for deduction.  Did you give away some of your product for free to encourage sales?  Place an ad in the newspaper or create a tv commercial?  This may all qualify.

Of course, all of these are subject to all of the rules and restrictions set by the IRS, particularly the home office deduction.  Therefore, please be sure to check with an accountant or another qualified legal expert to make sure that you qualify and/or are keeping accurate enough records.  And don’t hesitate to ask or look for more deductions—there’s always something else hiding out there!

The same holds true for more important things like bank statements.  I know I need to hold onto these, but I get itchy after a while—is it time to shred and get rid of them yet?  Maybe you toss yours right away, maybe you adhere to the 7-year rule we’ve all heard, maybe you just decide on your own when the time is right.  Is there a set amount of time that we should keep these records, though?

Keep the Important Records

The situation gets individualized here.  As for cancelled checks that have come with your statements, you only need to hang onto the ones that were for major items (such as your mortgage payment) or necessary for tax purposes (purchases for your business, etc.).  Some websites will say 3 years is okay, others prefer the 7-year rule.

In reality, the IRS can audit you up to 3 years from the date of your tax return, but 6 years is allowed if they suspect you of falsely reporting your income by up to 25%.  For this reason, it is probably best to keep all information related to your tax returns, any annual bank statements you might receive, and copies of important checks for 7 years, just to be on the safe side.  Whatever you do get rid of, be sure to shred it first to avoid any risk of identity theft.

Online Bank Statements

But wait—maybe you’re ahead of the throw-away game and all of your bank statements are now online.  You’ve gone green and kept up with technology.  What if you get audited?  Check with your bank for their specific regulations, but in general, banks will hang onto your statements for 7 years like you would, and you can request a paper copy at any time.  Your important checks are now online images, but that’s okay, too.  They are regarded as acceptable legal documents in the case of an audit.

If you choose to stick with the paper statements, you can keep your records (and clutter) down to the minimum by only hanging onto ones relevant to your home, business, taxes, etc.  If you go paperless, you’ll have even less to worry about.  I’ve gone paperless and de-cluttered my own home; now if I can just convince my parents to throw away those expired coupons and my old school lunch menus…

First-Time Primary Residence

The home you’re purchasing has to be your primary residence.  If you’re buying a vacation home or any secondary residence, you won’t qualify for the first-time home buyer credit.  You also have to own the residence for three years, or you’ll have to pay back the entire credit.

As long as you haven’t owned a primary residence within the last three years, you’re on the road to qualification.  It gets a little tricky if you’re buying a home with your significant other.  If you’re married and you owned a home but your spouse didn’t, neither one of you will qualify for the first-time home buyer credit.  However, if you’re not married, the person that did not own a primary residence can help qualify the purchase.

Home Buyer Credit Limitations

It’s important to note that you are not guaranteed $8000, though.  The amount you actually get back is 10% of the purchase price of the home, up to $8000.  There’s also an income limit.  Single people can qualify with an income of up to $75,000 a year, and married couples can qualify making a combined income of $150,000.

Once you get past the qualification, receiving the credit is fairly easy.  You do not need to fill out any special forms; just claim it on your tax return.  Again, it doesn’t count as a deduction because you will be receiving the entire amount back, so if you happen to owe money on your taxes, the first-time home buyer credit could turn things around and the government will end up sending you a check minus what you owed.  You can also talk to your employer to adjust the income tax withholding if you want to see your money sooner than next year, or speak to your mortgage lender about how to apply the credit toward the down payment on your new home.

• Job-related moving expenses if your new employer does not reimburse you
• Job-seeking expenses relating to your current employment
• Home office expenses if you own a home business (be forewarned, the guidelines here are pretty strict)
• Business expenses not reimbursed by your employer, such as travel, meals, and lodging
• Union dues
• Education expenses relating to your current employment
• Student loan interest
• Tuition and fees for certain qualifying higher education expenses
• Charitable donations (and it’s not just money anymore-you can itemize clothing and other material donations)
• Medical transportation expenses, such as parking and gas mileage for visits to the doctor, labs, clinics, etc.
• Medical aids like crutches, orthopedic shoes, hearing aids, glasses, contacts, etc., including equipment for handicapped people
• The cost of drug and alcohol rehabilitation programs

And finally,

• Fees for tax preparation or advice

That last one sounds pretty good, especially if your tax preparation fees will eat up a decent amount of your refund.  There are many more tax deductions out there, and each one can get more specific.  Of course, you do want to check on the guidelines and restrictions for each one to make sure you qualify.  For example, if you experience any casualty losses, you can deduct that, but the amount must be more than the sum of $100 and 10% of your adjusted gross income.  You could take the time to figure it out, only to find that you don’t qualify.

But don’t let the restrictions hold you back.  You might find an available deduction that will bring you an even nicer tax return, and that could be worth all the time you spent looking.