Have You Filed Your 2010 Federal Individual Income Tax Return?


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Attorney Carlon B. Walker offers some reminders about deductions that may apply to you.
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By Carlon B. Walker

Are you one of the millions of Americans who wait until the last minute to file his or her federal individual income tax return with the Internal Revenue Service? If you are, you should know that your 2010 federal income tax return (Form 1040) for the tax year ending December 31, 2010 is due on Monday, April 18, 2011. Usually, federal individual income tax returns are due on April 15 unless that day is a Saturday, Sunday or a federal holiday. Since the federal government will observe the District of Columbia holiday, Emancipation Day, on Friday, April 15, the due date for filing your 2010 Form 1040 is April 18, 2011.

Even though the due date for filing your 2010 Form 1040 has been moved forward one business day to April 18, 2011, the due date for filing your state and your local individual income tax returns generally will not be changed. You should review the instructions for your state’s 2010 income tax return to find out when your state return is due. You can also find information about the due date for filing your 2010 state individual income tax return at your local library.

After gathering all the information you need to complete your 2010 federal individual income tax return, don’t forget to determine if the following deductions apply to you:

 

 
Reinvested Dividends
 
Dividends are generally taxed when distributed. So, if your taxed dividends are automatically reinvested to purchase additional shares in a mutual fund, each reinvestment increases your “cost-or-tax basis” in the fund. If you forget to add these taxed dividends to your tax basis, you will overpay your tax when you sell your shares since your tax basis is subtracted from the sales proceeds to determine the taxable gain you receive upon the sale of your shares.
 
 
2009 State Income Taxes Paid in 2010 with Your Filed 2009 State Income Tax Return
 
If you owed state or local income taxes and paid them in 2010 when you filed your 2009 state or local income tax return, you should add the amounts you paid with your state or local tax return in 2010 to the total amount of state and local income taxes withheld from your paychecks in 2010 and the total amount of state and local income taxes paid by you quarterly as estimated taxes during 2010. The sum of these state and local income tax payments should be taken as an itemized state and local income tax deduction on Schedule A of the 2010 Form 1040.
 
 
Out-of-Pocket Charitable Deductions
 
If you spend money for items to prepare meals for a charitable organization, say a soup kitchen, or buy stamps that are used by a charitable organization, you should deduction the money you spent as a charitable contribution on Schedule A of the 2010 Form 1040. Also, if you used your car for a charity, you should deduct 14¢ for each mile driven.
 
 
Jury Fees Paid to Your Employer
 
Jury fees you receive for jury duty must be included in your taxable income. If your employer continues to pay you when you are serving as a juror, you may be required to give your employer your jury fees. You should deduct the jury fees that you give to your employer. On line 36 of the 2010 Form 1040, add the jury fees to the total amount for the deductible items listed above line 36 and then write jury fees on the dotted line next to line 36.
 
 
Child-Care Credit
 
The child-care credit is often forgotten by individuals who pay their child-care expenses through a reimbursement account at work. A maximum of $5,000 can be reimbursed for child-care expenses from a tax-favored reimbursement account. However, for the care of two or more children, up to $6,000 can qualify for the child-care credit. If your child- care expenses exceed the $5,000 maximum allowed by your reimbursement account at work, you may claim the child-care credit on as much as $1,000 of additional expenses you paid for work-related child care.
 
 
Making Work Pay Credit
 
You should have noticed the effects of this credit by the reduction in your payroll tax withholding during the year. However, in order to actually receive the benefits from this credit, you have to claim it on Schedule M of your 2010 Form 1040. This credit reduces your federal income tax up to $400 if you are single and $800 if you are married filing a joint return. If you are single, the credit starts to phase out at $75,000 of adjusted gross income and is phased out at $95,000. For married taxpayers, the credit begins to phase-out at $150,000 and is phased-out at $190,000.
 
If you’ve been searching for a job, made certain energy-saving home improvements, and/or refinancing your mortgage, you may be eligible for certain deductions or credits. You can find out your eligibility for these and other deductions and credits by doing research at your local library. After you have done your research at your local library, you can develop strategies that save you money at tax time-this year, next year, and beyond.
 
You might consider changing the number of withholding exemption you claim on the Form W-4 you give to your employer if you find that you owe the IRS a large amount of money or are due a big tax refund. The IRS withholding calculator can help you figure out your federal income tax withholding so your employer can withhold the correct amount from your paycheck.
 
 
 
Recommended Resources:
 
 
By J. K. Lasser
This book provides easy-to-follow advice and guidance on planning and filing taxes. It also contains tax planning tips and strategies, and filing tips and instructions to help you prepare your 2010 return.
 
 
By Barbara Weltman and J. K. Lasser
This book is straightforward guide to taking tax breaks and deductions and is completely revised to reflect important changes in this year's tax laws. In this book you will find deductions and tax breaks with regard to (1) you and your family, (2) your home and car, (3) your job or business, (4) your investments and retirement savings, (5) medical and dental expenses, (6) health savings accounts, (7) education costs, (8) your charitable giving, and (9) casualty and theft losses.
 
 
By Jeff Schnepper
This book lays out the simple, practical, and proven strategies that save you money at tax time. It explains how to convert personal expenses into business deductions and how to avoid an IRS audit. This book is organized into easy-access categories which include exclusions, credits and general deductions.
 
 
By S. Kay Bell
This book provides an overview of key tax laws that affect the lives of most taxpayers. It also provides an explanation of how taxes and tax breaks apply to you and your family, your career, your home, your investments, and your eventual retirement.

 

Carlon B. Walker is an attorney licensed to practice law in Michigan and Illinois. In his private practice, located in Chicago, he provides legal advice and counsel with respect to tax, employee benefits, and estate planning.The information contained in this article, however, is for informational purposes only and should not be construed as legal advice.

 

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