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A lot of tax advice focuses on looking ahead. But sometimes looking back is a good idea, despite clichés to the contrary. One reason: Catching errors that could lead to refunds.
For instance, say you discover you're among the estimated 2.1 million people who forgot to take the itemized deduction for sales taxes on your 2006 return. Overlooking this deduction was easy to do — legislation extending the deduction was passed late in the year, and information about it was left off income tax forms. According to the Treasury Inspector General, the refunds available for 2006 could approach $534 million.
The good news? You can still file an amended 2006 return to claim your share.
You may also have missed two other valuable deductions included in the same late tax legislation:
- The tuition and fees deduction, which lets you claim up to $4,000 of educational expenses on your 2006 tax return.
- The deduction for educator expenses, which was designed to help teachers recoup unreimbursed classroom expenses. The deduction can reduce your adjusted gross income by as much as $250.
Both deductions are available even if you don't itemize, but you'll need to file an amended return to claim them if you left them off your original filing.
Additional reasons to amend include business losses incurred in 2007 that could result in a tax-saving carryback and changes to IRA contribution rules for members of the military in combat zones.
Please contact us for more information. We'll be happy to review your prior-year returns for these and other changes that could benefit you. |
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