When you prepare your tax return for 2009, avoid these common errors:
Home office. Some people don’t take this deduction for fear that it might trigger an audit. However, it can be valuable. If you or your spouse has a home-based business and you have a portion of your home you use exclusively for that business, fill out Form 8829 to deduct a share of costs for utilities, home security, etc.
Tax-free income. Interest from municipal bonds and municipal bond funds is exempt from federal income tax. Don’t report such income on your tax return.
Charity deductions. Donations you made via credit cards in 2009 are deductible on your tax return for last year. That’s true even if the credit card charges were not paid until 2010. Indeed, that holds true for any tax-deductible expense you charged on a credit card in late 2009.
