Ask Andy: missed tax deductions/credits - WMC Action News 5 - Memphis, Tennessee

Ask Andy: missed tax deductions/credits

(WMC-TV) - 64,000 Tennessee tax-payers missed it in 2012.

It cost them nearly $130 million.

It's one of the most commonly overlooked tax deductions. I'll reveal it in a second.

But let me say first that there are a bunch of tax deductions that most of us skip right over, and folks, they are money in your pocket:

* MILEAGE DEDUCTIONS. Sure, you might think to deduct the mileage for using your personal car for work, but you can also deduct mileage for your doctor, dental or hospital visits -- to and from the location!

You can also deduct your mileage and travel expenses for charitable events, including mission trips.

* EARNED INCOME TAX CREDIT. This one's a credit instead of a deduction. It's the earned income tax credit, instituted to take the edge off of Social Security taxes and to encourage working families. Married couples with kids miss this one all the time. A couple with three kids and an annual income less than $52,000 could score as much as a $6,000 credit on their taxes.

And now for the big one -- the one that 64,000 Tennessee tax-payers missed:

* STATE SALES TAX DEDUCTION. Yes, you can deduct the taxes you paid on the stuff you bought! It can be as much as a $2,000 deduction. The IRS makes it easy to claim it.

"You don't have to save all your receipts for the whole year and try to figure out how much sales tax you spent," said IRS spokesperson Dan Boone. "The IRS provides tables based on your income and your family size. That becomes your estimate of your sales tax, and that becomes your deduction."

There's a resource a lot of tax-payers miss every year, too:  the IRS's FreeFile program. Depending on your income, you could have your taxes done for free from one of the agency's tax software contractors.

You can also seek free tax assistance from volunteers with the United Way of the Mid-South.

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