Many of the most popular tax deductions, including those for home mortgage interest and charitable donations, are available only to taxpayers who itemize their returns. Some tax deductions, however, can be claimed directly on the long form, making them accessible to many more taxpayers. When you start doing your tax planning for the coming year, take a look at the 1040 form and review the tax deductions you can use to lower your taxable income and your tax liability.
If you made a contribution to a traditional IRA, you can take a deduction for that contribution when you complete your 1040 tax form. You have until the tax filing deadline, usually April 15, to get your IRA contribution in. For 2011 the most you can contribute to a traditional IRA is $5,000. But if you are 50 years of age or older you can contribute an extra $1,000 to your IRA, for a total of $6,000 as pf 2011.
Health Savings Account
If you participate in a high deductible health plan (HDHP), you can open a health savings account (HSA) and take a deduction on your 1040 form. In order to quality as an HDHP, the plan must have a minimum deductible of $1,200 for a single plan or $2,400 for family coverage. For 2011, you can contribute up to $3,050 to a single HSA, or $6,150 to an HSA that covers your family as well as yourself. If you are at least 55 years of age you can contribute an extra $1,000 to either your single or family HSA.
Student Loan Interest
If you took out a student loan, you can deduct the interest you paid on that loan directly on the 1040 form. To get this deduction, simply enter the amount of interest you paid on line 33. You can also take a deduction for any tuition and fees you paid to attend school by entering the amount on line 34 and attaching supplemental form 8917.
If you moved during the prior tax year, you can deduct a portion of your moving expenses. In order to get credit for those moving expenses you must complete form 3903 and submit it with your return. Follow the instructions on form 3903 carefully, then transfer the total of your allowable moving expenses to line 26 of the 1040 form.