Tax laws are complicated, and tax forms aren’t much better.  It’s easy to miss a deduction or credit that is rightfully yours.  Here’s a list to consider for this year’s Form 1040.

Job Search Expenses.  If you were laid off and looking for another job in 2010, those costs are deductible.  Mileage driven for job searches, fees paid to employment agencies, and the cost of preparing and sending out resumes are all deductible.   But, sorry, that snazzy “interview suit” is just regular clothing, and not deductible.

Unreimbursed Business Expenses.  If you had a job, but wound up shelling money out of your own pocket for job related expenses, these can be deducted on Form 2106.  These include gifts to business associates (up to $25 per person); entertainment and meals where business was discussed;  membership fees in professional organizations; trade and business publications; and business travel expenses (mileage, lodging, meals) your employer didn’t reimburse.

Energy Savings Home Improvement Credit.  If you installed new windows, a new air conditioning system, new furnace, or other home improvements, you might be able to take a credit of up to $1,500 for those improvements, or up to 30% of the total cost of alternative-energy improvements.

Charitable Contributions.  Cash donations to your favorite charities are easy to figure, but don’t forget all the clothes, books, and other trinkets you took to Goodwill – these are deductible, too.  And did you drive somewhere to volunteer your time for a charity?  Make a lot of last-minute contributions in the grocery store checkout line?  Yep – all deductible. 

State Sales Tax.  If you live in a state that doesn’t charge income tax, you can deduct the sales tax you paid in 2010.  But don’t worry if you didn’t keep every single receipt through the year; the IRS provides tables that you can use to figure your deduction. 

Aging Parents.  If Mom and/or Dad live with you, you’re providing their support and they are earning little or no income, they may very well be your dependents in the IRS’ eyes.  This can net you a valuable extra personal exemption, and could turn your filing status, if single, to the more advantageous head-of-household.

Expenses on your Credit Card.  Deductible expenses, such as charitable contributions and medical expenses, don’t have to be paid in cash to be deducted.  Even if you charged them and haven’t yet paid off the balance, you’re allowed to deduct them on your tax return.

Tax-Prep and Investing Expenses.  Did you pay for a safe deposit box?  Buy magazines on personal finance and investing?  Consult with a lawyer or accountant to do tax planning?  Pay an accountant or buy software to prepare last year’s return?  It’s all deductible on Schedule A. 

Teacher Deduction.  If you’re a classroom teacher, aide, or even a school principal, you can deduct up to $250 spent on classroom materials.

Student Deductions.  If you went to school in 2010, you may deduct as much as $4,000 of your higher-education expenses.  Alternatively, you might qualify for the Lifetime Learning Credit, which covers undergraduate or grad school, or the American Opportunity Credit, which covers undergraduate coursework. 

There’s no reason to ever pay more taxes than you owe.  If you legitimately qualify for a deduction, take it.  Keep good records of your expenses so that – heaven forbid – you can back up your return if an auditor comes calling.

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