Saturday, February 7, 2015

The Three Most Misunderstood Tax Deductions (Even for Tax Professionals)

Dave Duval for CPA Practice Advisor writes: Each year during tax time the “most overlooked” tax deductions get a lot of press. And every year the lists include the same deductions, such as state sales tax, student loan interest, job hunting costs, and moving expenses.
The fact is, in my tax practice I’ve never overlooked these particular deductions, so I thought it might be more useful to list the deductions that are most often misunderstood, by both taxpayers and tax professionals alike. Here are three of those deductions, along with an explanation of the confusing aspects of each one.
State and local taxes
If your clients are itemizing deductions, they have the option of claiming either state and local income taxes or state and local sales taxes. They cannot claim both. The deduction is most beneficial to the millions of taxpayers who live in states that have no income taxes, such as Washington, Florida, and Texas, among others. SNIP, the article continues @ CPA Practice Advisor, click here to continue reading...