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You might be overlooking some tax deductions you are entitled to -- deductions that are not well-known, but could save you thousands of dollars on your tax bill.
The Texas Society of Certified Public Accountants has put together a very informative list of 16 lesser-known tax deductions that everyone should try to take advantage of. During such difficult economic times, every dollar that helps increase your potential tax refund can be critical. For instance, did you know that as much as $2,500 of the interest you pay on student loans is tax deductible as an adjustment to gross income? Those who took out loans to pursue additional skills through education last year could benefit greatly.
And for self-employed individuals who pay for their own health insurance coverage, the cost of the premiums to cover themselves and their families are also fully deductible. That can be very comforting for the many workers who transitioned from employee to independent contractor status last year.
What many people forget is that even the fees you pay for tax preparation are deductible -- so there is a deduction on this list for everyone. All you have to do is remember to take them as you file before April 15!
Top Tax-Friendly Cities
These cities came out on top (er, at the bottom, really) of the 2007-2008 District of Columbia Tax Rates and Tax Burdens Survey for the largest city in each state, plus D.C.
Tax rankings are based on 2007 tax return computations for a two-income couple earning $75,000 with one school age child. The real property tax is a function of housing values, real estate tax rates, assessment levels, homeowner exemptions and credits. The auto tax figure assumes the couple owns two cars and is based on the estimated registration fees, state and local gasoline taxes, and personal property taxes, if any.
Corbis / AOL
No. 1 Tax-Friendly City
Anchorage, Alaska
Income tax: $0
Property tax: $2,572
Sales tax: $0
Auto tax: $165
STATE & LOCAL TAX BURDEN: 3.6
(National median tax burden: 8.5)
Al Grillo, AP
No. 2 Tax-Friendly City
Manchester, New Hampshire
Income tax: $0
Property tax: $2,349
Sales tax: $0
Auto tax: $493
STATE & LOCAL TAX BURDEN: 3.8
Manchester Chamber of Commerce
No. 3 Tax-Friendly City
Cheyenne, Wyoming
Income tax: $0
Property tax: $1,326
Sales tax: $1,512
Auto tax: $665
STATE & LOCAL TAX BURDEN: 4.7
jupiterimages
No. 4 Tax-Friendly City
Seattle, Washington
Income tax: $0
Property tax: $1,698
Sales tax: $1,561
Auto tax: $457
STATE & LOCAL TAX BURDEN: 5.0
Elaine Thompson, AP
No. 5 Tax-Friendly City
Las Vegas, Nevada
Income tax: $0
Property tax: $2,251
Sales tax: $1,072
Auto tax: $486
STATE & LOCAL TAX BURDEN: 5.1
PictureQuest
No. 6 Tax-Friendly City
Jacksonville, Florida
Income tax: $0
Property tax: $2,456
Sales tax: $1,284
Auto tax: $195
STATE & LOCAL TAX BURDEN: 5.2
Detroit Free Press / MCT
No. 7 Tax-Friendly City
Sioux Falls, South Dakota
Income tax: $0
Property tax: $2,760
Sales tax: $1,518
Auto tax: $294
STATE & LOCAL TAX BURDEN: 6.1
AP
No. 8 Tax-Friendly City
Phoenix, Arizona
Income tax: $1,241
Property tax: $1,401
Sales tax: $1,849
Auto tax: $588
STATE & LOCAL TAX BURDEN: 6.8
No. 9 Tax-Friendly City
Billings, Montana
Income tax: $2,559
Property tax: $1,865
Sales tax: $0
Auto tax: $689
STATE & LOCAL TAX BURDEN: 6.8
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