Don't Overlook These Deductions

The tax code provides many deductions, which function by reducing the amount of income that's subject to tax. Some deductions are "itemized" which means the total of those deductions must exceed your standard deduction before you see any tax benefit. The standard deduction for 2007 ranges from $5,350 for single people to $10,700 for married couples. Some people don't have enough itemized expenses to exceed this standard amount.

But there are some deductions that you can claim without itemizing. That means you get to take these deductions in addition your standard deduction or itemized deductions. These deductions are called "adjustments to income" and are found on page 1 of Forms 1040A and 1040.

The most popular is the deduction for contributing to an Individual Retirement Account. As my colleague Jeremy Vohwinkle explains, you can take the IRA deduction on your '07 taxes if you deposit the funds by April 15th. What's more, you can even ask the IRS to deposit some or all of your refund into an IRA account, which can make saving for retirement just a little easier. Making an IRA contribution is a great last-minute tax strategy. For some taxpayers, it can mean the difference between owing taxes and getting a refund.

Other adjustments to income aren't as popular, but shouldn't be overlooked. If you relocated, for example, you may be able to deduct your moving expenses. You also might be able to deduct interest paid on a student loan or early withdrawal fees paid for cashing out a bank certificate of deposit.

Some people might even be able to deduct their job-related expenses as an adjustment to income rather than as an itemized deduction. This is advantageous mathematically, since you won't need to itemize to write off your expenses. This deduction is available only for certain professions, namely performing artists, members of the National Guard or Reserve, and fee-based government officials.

Teachers also can write off expenses for purchasing classroom supplies.

More tips:

• The 13 Most Overlooked Tax Deductions (Kiplinger.com)
• Top Ten Tax Deductions for Professionals (Nolo.com)