Tax Deduction You Shouldn’t Miss

Last Revised on January 31, 2008

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It’s time to file a tax, but a lot of people may be missing on some of the easiest deduction they can get:

Noncash contributions: The deduction is allowed in the year of the charge, not when you actually pay the bill. Get a receipt from the charity to which you made a donation and, if you’re still worried about documentation, get the credit card company to send you their record of the transaction.

Health insurance premiums: Any health insurance premiums you pay, including some long-term-care premiums based on your age, are potentially deductible. You have to add these, however, to your medical expense pot. Medical expenses have to exceed 7.5% of your adjusted gross income (AGI) before they give you any tax benefit.

Student higher education expenses: For 2007, if your adjusted gross income isn’t more than $65,000 ($130,000 on a joint return), you can get an above the line deduction of as much as $4,000 for any higher education expenses you paid.

Clean fuel credit: If you bought a new hybrid gas-electric auto or truck in 2007, you can get a conservation tax credit of between $250 and $1,000 and an additional fuel economy credit of between $400 and $2,400, depending on the make and the fuel economy.

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