Filling taxes can be a burden, and unfortunately, people have to do it each year. The IRS has stated that the most common mistake made by people is to forget to put their Social Security Number, or to write the wrong number.
Too many mistakes
However, according to the experts numerous other graver mistakes are done each year, which can be very costly. Many people do not know that they can use certain deductions when they fill in their tax papers, and as a result they pay more than it is necessary. It seems that the number of deductions is around $1 trillion. More than 92 million tax payers from the United States of America claim around $700 billion each year. People over 65 have the right of claiming an even bigger deduction.
People can make lots of mistakes when they fill in their taxes. Sometimes they pay too much, by forgetting to ask for some of the deductions they are entitled to. The state sales taxes are pretty important. In this case people have to choose between deducting local and state sales taxes or local and state income taxes. The income state deduction is the much better option, because the income tax is a bigger burden.
IRS offers tables which show just how much people from various states can deduct. However, numerous purchases influence the deductions. You can use the calculator provided on the IRS website in order to know how much you get to keep.
Which ones to avoid?
One of the most important subtractions you can save are the reinvested dividends. This is not a tax deduction, but it is pretty important as well, as it can help you make some money. It is very important that people do not forget to include the reinvested dividends in their basis results in double taxation of the dividends. They should first do it when they receive them, and then when they are included in the sale process. In case people do not know what their basis is, they can ask for help.
The job hunting costs are pretty important as well. There are millions of Americans who were on the look-out for a job in 2011. It is very important for them to keep track of the job search expenses. People can deduct job-hunting costs as miscellaneous expenses if they itemize, but only their total of their total miscellaneous deductions exceed 2% of their adjusted gross income. Some of these deductions can include the cost of food and transportation, in case people had to travel in order to search for a job. The cab fares are included as well, and so are the employment agency fees. The cost of the business cards, advertising, and postage fees are also included in the deductions. You also receive tax deductions in case you had to move at least 50 miles from your home in order to find a job. In case you used your own car you will receive compensations for the expenses. The tolls and the parking will be deducted as well.