7 Ways to Save Money on Taxes

Wow, #1 is such insanely poor advice. First, you can only deduct your medical expenses if they are 1)non-reimbursed by an FSA or HSA and 2) if they EXCEED 7.5% of your adjusted gross income. Unless you are self-employed, were very ill, or have extremely expensive medications that exceeded any FSA this won't apply to you.

Thanks for your insight in the Itemized Medical Deductions... You are of course correct in your comments for item # 2

Elizabeth,

consult a professional, but there is pretty much no way to get a credit/deduction for adults living in your home, unless perhaps they are disabled and you have been made a legal guardian or something. Try charging them rent or kicking them out!

I am a tax professional and I can't believe what I am reading! The author has made sweeping statments that these items are deductible when the truth is they will only be deductible for certain taxpayers. Each item listed in this article has it's own set of specific rules. If you do meet all of these rules, you will not get the deduction or credit.

Every year I see articles like this that are only half true. The problem is that my clients also see these articles and they believe them. They come into my office and announce that they want to deduct this or that and I have to explain to them that they do not qualify. That makes me the bad guy when really the bad guy is some unknown author who obviously does not know enough about tax law to be writing about it. Marie Claire - do your homework next time. This article is going into my "you can't believe everything you read" file.

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Item 2. "As long as you itemize, nearly all of your medical expenses can be deducted" is TOTALLY FALSE AND MISLEADING.

Medical Expenses are deductible only to the extent that they exceed 7.5% of your Adjusted Gross Income and that is a big hurdle even for someone with no health insurance. And even if your medical expenses exceed this amount they are not 100% deductible. Only the excess is deductible. So even for these folks your "Nearly all" statement is bogus.

Believe nothing you read, see, or hear. Check it out for yourself especially the changes in the IRS rules for 2010 (e.g.AMT tax). Figuring your taxes is like a naked person in a room full of hot stoves. I am now trying to figure how much my vote is worth to the politicians in Washington. Staying poor is starting to look attractive based on all those programs listed in the IRS publications. Relaxe I was just kidding.

Sorry about the typo on the previous post! What I meant to say was that if you do NOT meet all of these rules, you will not get the deduction!

anybody know if/how to get a tax credit for adults (related and not) living in your home-not paying much, if anything- so we are their sole support.

Those who work hard and have the skills also get jobs right out of college, Kayla...

ELIZABETH

Yes you can claim the non relative people living in your house as dependants, I lived with a man for 6 years and he was able to claim me as a dependant every year, reason he was able to claim me was cus I had no income, anyone who lives with you (non related) where you are the sole provider can be claimed as a dependant and that includes adults, you would have had to pay their way for 50% or more of the tax year, so yes it can be done, I dont know about relatives though... hope this helps

Item 2 is a bit of a strech. The medical expenses are only deductable on Schedule A but is also subject to 7.5% of your AGI. So at 55,000. AGI you would be able to deduct medical over $4125.00.

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My husband made LESS this year than the previous 2 yrs and we ended up paying MORE in taxes. (and nothing else had changed) Don't think I like this "change" in government!

Jean, I agree completely. I am also a tax professional and have to deal with not only clients but friends and family asking if I know the rules because someone puts out an article like this. Rarely do I have clients utilize the health deduction because of the steep 7.5% agi limitation. The prepaid mortgage interest is completely false unless she is referring to mortgage points which then are subject to amortization rules. I think it should be illegal to solicit such advice without proper licensure or certification.

This is really poor journalism -- as others above have noted, deductions for medical expenses and student loan interest are availalbe only in VERY limited situations. For example, your medical expenses have to exceed 7.5% of your income, and then you can only deduct the amount that is above the 7.5%.

http://www.irs.gov/publications/p502/ar02.html#en_US_publink1000178856

Unbelievably irresponsible journalism here.

Elizabeth you need to check the rules for a qualifying relative. I believe there are certain instances where if you provide more than 50% of someone's support you can claim them even if they do not live with you i.e. you take care of parents who live in a nursing home, etc. There are several criteria and I could not tell you specifically what they are but it may be worth looking into.

#6 doesn't make much sense, you get 13 interest payments this year but only 11 next year...you don't gain anything. And #2, you can't deduct medical expenses unless they are over 7.5% of your income...do not take any of the advice you see here seriously or you could end up in a lot of trouble. Great Article Marie! (Sarcasm)

Thanks for the tips! I had no idea about dental expenses. I've spent almost 9K this year on dental treatment (including braces). Since I lost my job in October, I know that it's WAY more than 7.5% of my AGI. Now to figure out how to do the deduction.

My husband cannot deduct his student loan interest... even though he owes $170,000 (more than twice our mortgage and a lot more than his annual salary), he earns "too much" to deduct the interest paid. Crazy! It's common for doctors, for example, to end up with $200,000 in student loan debt, and they have to pay that off on a salary of maybe $120,000-$150,000/yr (some make more, some make less). They pay a higher percentage of taxes, and the Average Joe wants anyone earning over $100,000 to pay even higher taxes because they had the nerve to go to school for years on end to try to earn a good living...