Valuable Tax Deductions That Ring True

Texas CPAs Provide List of Tax Deductible Expenses

When you overlook tax deductions, you overlook savings opportunities.  These five golden tax deductions should always be kept in mind when preparing future tax returns. 

Interest paid on student loans is deductible as an adjustment to gross income – up to $2,500 per year for as many years as it takes to repay the loan. This deduction is subject to a phase-out depending on your adjusted gross income.

Texas Society of Certified Public Accountants (TSCPA) immediate-past Chairman James A. Smith says that charitable contributions of many kinds can be deducted as itemized deductions.

“Most people know that charitable contributions of cash can be deducted as an itemized deduction. But not everyone realizes that you can deduct the non-cash donations, such as used clothing, furniture, and household goods. The deductible amount is based on the item’s fair market value,” said Smith.

Texas CPAs also say that contributions to a traditional IRA might be deductible, depending on your age, total income, and whether you are covered by a retirement plan through your employer.  

Home equity loan interest can also be deducted.  The IRS permits you to deduct interest payments on up to $100,000 of home equity loan debt. 

And lastly, if you incurred a penalty as the result of an early withdrawal from a certificate of deposit or other type of time deposit savings account, the amount of the penalty is deductible as an adjustment to gross income.  These five golden tax tips should ring a bell when it comes time to file your 2008 return.