Clipping coupons is smart; savings receipts is smarter. That's because receipts tend to come in large dollar denominations, whether it's a restaurant meal, a trip to some far-flung destination, a generous donation to the Girl Scouts or new computer. Deductions for charitable donations can be taken by any taxpayer. But if you're searching for a job, many more expenses can be deducted so long as you have receipts, and if you're running a little business from home, there are deductions aplenty covering everything from office supplies to education expenses. But act fast as many of these deductions will either expire or be greatly reduced after 2009.
Probably the biggest deduction in this category is the one under section 179, which allows business owners to deduct up to $250,000 in 2009 for the purchase of office furniture, computers and other business-related equipment. The items could even include a big-screen TV if the businessperson can show the item is necessary to the business. Before 2008, the deduction was limited to $125,000, and it will revert back to a lower level in 2010, notes Ed Smith, a tax partner in the Boston office of BDO Seidman LLP.
"Before year end, make sure that your tax documentation is there and in good shape receipts, a list of expenses and what they're for," says Smith. "It's awfully difficult to track down documentation at a later date."
See tax moves to make before the year's end:
Introduction: Tax-Saving Tactics
Capture Stock-Market Losses
Donate and Deduct!
Reach for the Medical Deduction
Go Green for Tax Breaks
Prepare to Convert to a Roth IRA