Tips On Preparing Taxes

Absolute Allowable Deductions-There are certain deductions that are allowed regardless of whether you itemize. Such deductions include IRA and qualified pension contributions, student loan interest, moving expenses, alimony, medical savings account deductions and, for the self employed, the health insurance deduction and deduction for half the self employment taxes paid. These are known as "above the line" deductions. The infamous "line" is your adjusted gross income -- line 37 on Form 1040.

Which is bigger -- your standard deduction or the sum of your itemized deductions? We're now "below the line." The chart to the left of line 39 on your 1040 form for 2007 lists your standard deduction. Compare this amount to your total allowable itemized deductions. That's the sum of your allowed medical expenses, taxes, interest, charitable contributions, casualty and theft losses, and miscellaneous itemized expenses. Always do it both ways . . . and, subject to the alternative minimum tax (and don't even try to get into that), always take the higher amount.

Get Filing Compliant-
None of this matters if you don't actually get your return to the IRS. Even if you owe money, there's interest and penalty for not filing, in addition to interest and penalty for not paying. You've done the hard work, now get it off your desk! Or file for an extension