Tax Q&A

This article courtesy of Feed the Pig. Copyright 2011 American Institute of Certified Public Accountants.

There’s less than a month until the 2011 tax return deadline, April 17. Last week, in Tax Q&A: Part 1, we covered a few basic tax questions. This week, we continue with questions and answers from the American Institute of CPAs to help make sure you pay no more taxes than you should.

How do I know if I can take special tax breaks? Many taxpayers don’t think about the special tax provisions that may apply to them and often pay more tax than they need to pay as a result. The special provisions include the earned income tax credit, the child tax credit, the American opportunity credit and the adoption credit. Check with your local CPA or the official IRS website to see if you qualify.

What are some deductions I might be able to take? Your 2011 tax return could be your last chance to claim credits for energy-efficient home improvements or other provisions that are set to expire at the end of this year unless Congress extends them.  Expiring provisions include deductions for tuition and fees, educator expenses, mortgage insurance premiums and the option to include your state and local sales taxes paid as an itemized deduction.  Review some tax savings strategies on the AICPA’s 360 Degrees of Taxes website.

Can I deduct my health insurance premiums if I am self-employed? It depends. If you’re self-employed, you may be able to deduct 100 percent of health and long-term medical costs for yourself, your spouse and your dependents. This deduction is taken as an adjustment to income and it can be taken only if the self-employed person or spouse is not covered by an employer health insurance plan.

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