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Help Desk: Tax Tips to Remember for 2012

6:04 PM, Feb 18, 2013   |    comments
(AP file)
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Deductions, credits, earned income - and the list of terms goes on.  The 11Alive Help Desk wants taxpayers to be aware of the many deductions and tax breaks that they may be missing out on.

RESOURCE GUIDE | Tax Tips and help for 2012 filing 

MORE | 11Alive Help Desk providing tax tips and help this week

Taxpayers can take advantage of extended energy credits

Energy-efficiency tax credits allow homeowners to claim up to 10% of the cost of improvements up to the maximum lifetime credit of $500.  The home must be an existing property and a principal residence where a homeowner lives most of their time. 

Eligible improvements include: biomass stoves, air source heat pumps, central air conditioning, insulation, roofing, non-solar water heaters, window & door improvements, and skylights.

Job search expenses may be tax-deductible

According to the Internal Revenue Service (IRS), for unemployed individuals who have not had a substantial break between the ending of their last job and looking for a new one, or employed workers seeking a new job in their current line of work, certain job search expenses may be tax deductible.

Job search expenses that qualify for a reduction include: resume development, preparing and mailing resume copies, professional placement services and unreimbursed mileage.

Filing separately while married can sometimes lower a tax bill

The marital status as of December 31 for the year that taxpayers are filing their return, determines the filing status.  There may be more than one filing status that applies to taxpayers. 

When married, taxpayers can file as married filing joint, or married filing separately.  Generally, married taxpayers file together because of the added benefits.  This includes eligibility for certain credits. 

An example of how filing separately can be beneficial is if one of the spouses has low income but high medical bills. According to H&R Block, it may be more beneficial to file separately so that those expenses can be claimed as itemized deductions. 

Military personnel deal with complicated tax outlook

Due to the complicated nature of many military personnel tax returns, service members may be missing out on all available tax breaks. 

For military personnel assigned duty in combat zones ending December 31, 2012, their 2012 tax return is due July 1, 2013.  While combat pay is not taxed, it can be included as earned income to qualify for the Earned Income Tax Credit, according to H&R Block.

Personnel serving in a combat zone may have their spouse sign their return without power of attorney.  A spouse may also sign for a solider who cannot sign on their own for medical reasons, in which case a statement explaining such a situation should be attached to the return.

Pay and allowances received for living purposes, disability, education, moving and family separation may be excluded from income.  Military taxpayers who are required to move due to a change of duty may be eligible to deduct necessary expenses for their household relocation.

The cost of upkeep to military uniforms may also qualify for itemized deductions, in addition to travel expenses accrued if a member of the armed forces travels more than 100 miles away from home to report for reserve duties.

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