Some Items to Check Before Filing Your Return

Here's a quick and dirty list of things that are commonly missed or done incorrectly, and should be checked before filing your return:

1. If you are self-employed and pay Medicare premiums, be sure to include the costs in the calculation of your self-employed health insurance deduction.
2. Bonus Depreciation:
• Is allowed only on new purchases;
• Items purchased between January 1 and September 8, 2010, are eligible for 50% bonus depreciation;
• Items purchased between September 9 and December 31, 2010, are eligible for 100% bonus depreciation;
• You can elect out of the bonus depreciation. You need to assess your business tax situation and determine if taking the bonus deprecation will be a waste in the current year. You may need the depreciation more in future years.
3. Schedule A, State Taxes - I have often seen a deduction taken for vehicle tax renewals. This tax is only deductible on Schedule A if is based on the value of the vehicle. If you see "Ad Valorem", this is the portion that is deductible. This applies to your property taxes as well. Non Ad Valorem taxes are not deductible.
4. Mortgage interest deduction is limited to the interest on $1,000,000 of home aquisition debt ($500,000 for MFS). Home equity debt is limited to interest on $100,000 ($50,000 for MFS). 
5. Before taking losses related to S-Corporations or Partnerships, it is CRITICAL that you have the basis to take the losses.
6. There are many opportunities for errors with rental properties, as well as some rule changes. I'll cover rentla properties in the next blog.