CPA Barry Steiner says a lot of people could get more back by itemizing their deductions.
You've heard the phrase: "Don't mess with the IRS."
But while tax cheats are one problem, CPA Barry Steiner says too many people cheat themselves at tax time.
"I've seen too many cases where they could save $4,000 on taxes by itemizing," he said.
Forty-six million taxpayers filing itemized deductions claim $1 trillion, Steiner said, compared to the 85 million taxpayers who just file the standard deduction. Those claims total just $500 million.
For 2009, the standard deduction is $5,700 for singles and $11, 400 for married couples filing jointly, and Steiner said there are several ways to save money on taxes this year that shouldn't be missed:
- Did you buy a new car after mid-February, 2009? There's a deduction for state and local taxes.
- Did you buy a home? There's an $8,000 tax credit for first time home-buyers. Other buys can also cash in.
"If you have lived in your home for the last five out of 8 years, you can get up to a $6,500 tax credit as well, which so many overlook," said Steiner.
- Did you go green? Energy-saving home improvements and appliances can translate to more green in your wallet. Just look for the 'Energy Star' sticker and you're eligible to write off 30 percent of the costs up to $1,500 dollars.
- Going to college? New this year, the American Opportunity Credit provides a $2,500 tax credit for college costs.
- Unemployed? The first $2,400 dollars in unemployment benefits are tax free.
The White House has a tool on its Web site that makes the new stimulus tax credits easy to find. Just answer the questions and add up the savings. The average tax refund is up 10 percent this year -- about $3,000 per filer.
One credit that's causing confusion is the "Making Work Pay" tax credit. Millions could actually owe the Internal Revenue Service money because the government gave people too much money in their paycheck under last year's stimulus package.
The government did not take all factors into account when calculating the credits and paid out too much money. The tax credit is worth $400 for singles and $800 for married couples filing jointly.
But whether or not you already got the money or are self employed and have yet to cash in, you still have to file Schedule M to get the credit on your 2009 taxes.