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Maximize your return – get the 411 on deductions in different career fields

Tax season is nigh – whether you have one, two or five W-2 forms, the task upon you now is to maximize your return. Since nothing is certain but death and taxes, why not outwit taxes with a career-specific strategy?

Don't forget job-related deductions while you're deducting your house interest, charitable gifts, student loan interest and ad valorem tax on your car. If you're employed, check out the Making Work Pay provision of the American Recovery and Reinvestment Act. In 2009 and 2010, it will provide a refundable tax credit of up to $400. Then ask yourself, "what do I do, and what can I deduct?" We show the way, starting with a field recently hit hard by budget cuts:

1. EDUCATION
   Teachers, save your receipts. The interactive wireless slates, lab equipment and monitors you want don't have to wait for Santa or budget improvements. While most education tax credits (such as the Hope or Lifetime Learning Credit) are catered towards students, there's plenty for educators too. If you are a grades K-12 educator working at least 900 hours a school year, you're eligible for up to $250 in education expense deductions for unreimbursed purchases. According to the IRS, educators deducted just over $893 million out-of-pocket classroom expenses in the 2005 tax year. Record receipts for meals and travel for seminars and training conferences, science lab uniforms and school logo items.  
   
   
2. ARTS & ENTERTAINMENT
   Goauche and taxes go together like oil and water. But as a creative, you can make the tax code work for you. Here's the key to artsy deductions: Show the IRS that your art is a business, not a hobby. That means tallying receipts of pieces, tickets or commissions sold, to show the IRS you're generating revenue (or at least trying). The second key is to define your taxable income. Unlike other professionals, artists rarely rely only on a paycheck. They may get supplementary income from prizes, fellowships, endowments - and even the barter system (taxable income is the difference between barter price and the market value). Also pay attention to depreciation (Form 4562), your home studio (Form 8829), and gas mileage and meal receipts for gallery openings.
   
    
3. CRIMINAL JUSTICE
   Protecting citizens from crime requires an authoritative presence (of uniform or brawn) as well as mobility and communication. Taxes may cover these expenses if not reimbursed by your department: Union dues, cell phone bills for "official capacity" calls, police magazine subscriptions, dry cleaning and mileage on your own car if it takes you to training or special assignments. According to the IRS, taxable income also includes "income you earn from outside employment, such as being a security guard or a retail sales person. Other sources of taxable income might include Workmen’s compensation, disability income, performance bonuses or monetary awards." Even "off-duty" purchases can be fair game: Check to see if you can write off ammunition for your off-duty firearm, and if your department has height/weight standards that allows you to deduct your gym membership.
    
4. SMALL BUSINESS OWNERS
   Entrepreneurs: The good news is you get a lot of federal support this year. The downside is plowing through so many new deductions and stimulus provisions can be tedious. Read carefully about the economic recovery bill’s provision, which authorizes the Small Business Administration to reduce or waive loan-guarantee program fees. Compared to an employee, you can deduct a lot more: Business infrastructure, mortgage interest and property taxes, travel, one-time office equipment and family employee discounts. What else:
   
   
   1. Equipment: Businesses need new gear, and the bill lets you deduct up to $250,000 for property purchases like vehicles, machinery and computers. That’s up from $125,000, but only for businesses spending less than $800,000 on capital expenditures.
   2. Hiring: It pays to hire with your heart. Through the Work Opportunity Tax Credit, earn a $2,400 credit for each unemployed military vet or high school dropout that you hire. Also, claim a tax credit of 40% of the first $6,000 in wages paid to such workers.
       
5. NURSES
   From RN licenses to malpractice insurance to special shoes, nurses qualify for a gamut of deductible expenses. If you're a traveling nurse, be sure to document to the IRS your "tax home" (where you pay mortgage or rent). Proof is in a registered voting card, driver's license and tax returns in that state. Wherever you live, look into deducting continuing education (CEUs) expenses if you're getting your license renewed or taking professional development courses. Also, take an inventory of how often you use the equipment you buy. Some of it surprisingly considered medical (like a personal digital camera to document wounds). Finally, medical books and trade journals are fair fame for deductions. Remember that drug books literally have a short shelf life and can't be counted for depreciation.

(Note: This article is only a general guide and that qualifications for deductions vary with each career, employer or state. If your situation is complicated, contact a tax professional and/or refer to the Internal Revenue Service's web site at http://www.irs.gov/.)

Aimee Chou is a Web Producer for EarnMyDegree.com. As April 15 approaches, she’s currently researching itemizable deductions for writers.

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