Free From Broke

A Personal Finance Blog for Regular Folks

Tax Deduction

Which is More Valuable: Tax Deduction or Tax Credit?

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As Tax Day draws closer, many are looking for documentation and trying to figure out whether they are taking a deduction or credit for each item that they hope will bring a tax advantage.

Understanding the difference between a tax deduction and a tax credit is important — especially when you stop to consider that one is more valuable than the other.

Is That a Deduction or a Credit?

The difference between a tax deduction and a tax credit can be expressed by the way it affects your taxes.
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10 Common Overlooked Tax Deductions

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As you start getting your tax information together, don’t forget to look for tax deductions.

While it is mostly too late to rack up new tax deductions, you can go back through your expenses from last year and figure out if you are eligible for another deduction or two.  Every little bit helps when it comes to decreasing your tax liability.

If you are looking for a few more deductions to add to your tax return, here are 10 common overlooked tax deductions to consider:

1. Charitable Mileage

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Still Want a Deduction for Tax Year 2011? It’s Not Too Late

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Now that 2012 is underway, many are concerned that it is too late to log more deductions for 2011.

For the most part, you’re out of luck: It’s too late to sell those losing investments for a deduction, or donate to a charity for a 2011 deduction.  December 31 has passed, and many of your chances to lower your taxable income have passed along with the old year.

However, it’s not too late to squeeze in a couple other tax deductions.

Indeed, you have the opportunity to find new tax deductions if you can contribute to a Health Savings Account or a traditional IRA.  You have until April 15 to make contributions to traditional IRAs and HSAs for the previous tax year (this year April 17th). [Read more…] about Still Want a Deduction for Tax Year 2011? It’s Not Too Late