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Maximizing Your Tax Deductions

Knowing exactly which tax deductions you are eligible for can be quite confusing.  Not taking deductions you are eligible for can result in a lower refund than you deserve or even worse, paying more than you should owe.  On the other hand, attempting to take tax deductions you aren't qualified for could get you audited and paying hefty fines or serving jail time.  No matter which way you cut it, attempting to figure out your own tax deductions is risky business.  Fortunately, you can minimize or even eliminate that risk by using online tax preparation software such as Turbo Tax Federal Free Edition to calculate your deductions for you.

The software is extremely user-friendly and will help you determine which tax deductions you qualify for by asking a serious of questions.  As long as you answer these questions honestly, you will get a fair return and be able to take advantage of all the tax deductions you qualify for without taking unnecessary risks.  Even better yet, once you have completed your return, the software automatically checks your refund to evaluate any possible red flags that might set you up for an audit.  This feature alone can provide a great deal of peace of mind.

If you are figuring out your own taxes the first thing you have to decide is whether you will be taking the standard deduction of $5450 for an individual or $10, 900 for married couples or itemizing your deductions because this will affect which tax form you need to fill out.  If you feel that your deductible expenses are greater than the standard deduction, it would be worth your while to itemize.  If you opt to use the free online tax preparation software, you can simply answer all the pertinent questions and the program will determine which deductions you qualify for and will automatically fill in the proper forms electronically.

Some deductions that people are unaware of include moving expenses if you moved to get a new job, state sales tax on large purchases, out-of-pocket charitable donations such as your gas expenditures when volunteering to help flood victims or food you donated to the local homeless shelter and interest paid on a student loan.  The easiest and least expensive way to avoid missing important deductions and make sure you get the greatest refund or lowest tax liability possible is to enter your information into Turbo Tax and let their program take all the guess-work out of it.