Business Feature: Tax deductions often overlooked

CNJ staff photo: Tony Bullocks Tax forms are available at the Clovis-Carver Public Library.

By Sarah Meyer: CNJ staff writer

Filing federal and state taxes gets more complicated every year, experts say. This year is no exception, with several changes for filing federal and state income tax.

“Unless you keep up with the law, you should get a professional tax preparer,” said Mary Esther Marin, who has owned Marin Tax Service in Clovis for 54 years. “There’s so many credits you could lose out on.”

Keeping track of all those little expenses can really add up when it comes to tax time, especially for people who itemize deductions or who have a small business, she said.

Mary Hernandez, owner of Hernandez Tax, agreed. She suggested bringing in anything that could be considered a deduction.
“Bring in too much, it’s better than bringing in too little,” Hernandez said.

She said a deduction commonly overlooked is energy credits. She said up to a $500 deduction is available for installing energy-efficient windows, doors and appliances.

Marin and Hernandez listed several changes in federal tax deductions for 2007:
An increase in the standard deduction
An increase in the exemption for each dependent
Alternative minimum tax exemption decreased
IRA deductions expanded
Standard mileage rate for 2007 is 48.5 cents per mile; to move or get medical care, 20 cents a mile
An increase in the maximum adjusted gross income that is allowed to be eligible for the earned income tax credit
Returns may be mailed to a different address than last year
Telephone excise tax credit has expired
Tuition and fees for eligible persons may be taken as a credit rather than a deduction.

Taxpayers who have deductions that total more than the standard deduction will benefit from filing the long form or 1040, Marin said.

Several employee expenses also may be deductible, including unreimbursed mileage expense, business lunches, tax preparation fees, union dues, uniforms and professional dues.

New Mexico is offering residents 8 percent of the earned income credit.

“We’ve got some good tax rebates this year,” Marin said.

Hernandez said illegal aliens should also file tax returns and are eligible for refunds. She said they will be assigned a tax number and do not have to worried about being turned in because the IRS does not share information with other government agencies.

Fast facts

Federal tax deductible items include:
Medical and dental expenses
Mortgage interest
Personal property taxes
State income tax
Real estate tax
General or state sales tax
Points on mortgage
Investment interest, as shown on Form 1099
Charitable gifts (receipt required for $250 or more)
Employee expenses

On the ’Net

Information:
irs.gov
tax.state.nm.us