Deduction options may surprise taxpayers

Tying the knot, children, donations can help boost refund

IRS offers techniques for handling taxes

More tax tips from the IRS:

• The maximum IRA contribution for 2008 is $5,000. If you are 50 or older, it is $6,000.• Receipts are now needed for cash contributions to charities.• Consider a portfolio adjustment. Up to $3,000 can be deducted in capital losses each year.• The Housing and Economic Recovery Act offers first-time homebuyers credit of up to $7,500, but it must be paid back over 15 years. It also has a provision that increases an individual taxpayer’s standard deduction by the amount paid for state and local property taxes for those who do no itemize deductions.• Beware of scams. The IRS will never send an unsolicited e-mail. If one shows up unexpectedly, delete it.

In a hurry to get married? Do it before Jan. 1.

The baby is due any day now? Hope for delivery by Dec. 31.

Those are just a couple of end-of-the-year events that are tax deductible and could boost your income tax refund next year, the Internal Revenue Service and tax preparers say.

But there are several actions you can still take — ones that don’t require getting married or having a baby — to reduce your taxes or build up your refund total.

“One of the big things that’s often overlooked is charitable contributions,” said Debbie Hanson, district manager for Jackson-Hewitt Tax Service in Lawrence and Topeka. “I know it’s a tough year moneywise, but everybody has things around their house that they can donate to Goodwill or another charity.”

The charity will give you a receipt for a noncash contribution. Save those receipts and make a list of them. The IRS allows you to deduct the fair-market value. Many people underestimate that value, Hanson said.

To accurately find out what it is, you can use a Web site tool that does it for you at itsdeductible.com, operated by TurboTax. You can set up a free account.

“The program holds up to the test of audits,” Hanson said. “What these people do is shop the thrifts for you and figure out the value.”

A new deduction this year is property taxes.

A single person can deduct $500 from property taxes and married couples filing jointly can deduct $1,000, said Robbie Arney, marketing coordinator for H&R Block in Lawrence and Topeka.

The property taxes have to have been paid before the end of the year, she said.

Higher standard deduction rates for tax filers also are in effect this year, Arney said. “They’re geared for inflation,” she said.

Something homeowners might want to hold off on is installing energy-efficient products, such as new windows, insulation or storm doors. Congress passed an energy tax credit, but it isn’t effective until 2009, Arney said.

An important end-of-the year chore is organizing tax records and receipts so they will be ready to go when you start figuring taxes, Arney said.

“You have to keep track of medical expenses and mileage for driving back and forth to the doctor,” she said. “That’s one that a lot of people don’t know you can do.”

To emphasize the importance of tax deductions, H&R Block will be celebrating the birth of the last baby born in 2008 at Lawrence Memorial Hospital. Block will be offering the parents a gift bag and free tax advice.

“Everybody makes a big deal out of the first baby of the year, but we at H&R Block know it’s the last baby that really counts,” Arney said.