Personal income-tax filers looking to reduce their tax burden can take advantage of several ways to lower adjusted gross income regardless of whether tax returns are itemized.
"Contrary to popular myth, the IRS does want you to take legal deductions," said Jackie Perlman, who researches tax law for H&R; Block Inc. in Kansas City, Mo. "It's the illegal ones they don't want you to take."
These deductions are allowed as adjustments to your total income. But you must wade through the full 1040 form to get the advantage. You won't find them on the 1040-EZ return.
The best-known of these deductions is claiming contributions to an individual retirement account.
Here is a rundown of a few of the lesser-known items:
Educator expenses. If you are a K-12 teacher, counselor, principal or school aide and worked at least 900 hours during the 2003 school year, you can deduct up to $250 for out-of-pocket classroom materials. Home-schooling expenses do not count.
Moving expenses. You can deduct the costs of moving to a new home for a new job if you paid for the move or if your employer reimbursed you via income; it would show up as additional wages on your W-2.
Line 33. Not detailed in the adjusted gross income section of the 1040 form are lists of other deductions that get lumped in with line 33. This is where you can take up to a $2,000 deduction for being the original buyer of a qualified Toyota Prius, Honda Insight or Honda Civic Hybrid last year.
Also, military reservists may recoup money here, as long as they drove more than 100 miles from home and had to pay for an overnight stay.
Next week: Amending last year's return.