Deductions You Shouldn't Skip

The same goes for some of your charitable contributions -- the unused portions may be carried forward as well. Why? Because some charitable contributions are limited by the amount of your adjusted gross income. That means, if the contribution exceeds a certain percentage of your AGI, you can't deduct it.

Odds are good you didn't even realize there were limitations on your contributions, mainly because most contributions are limited to 50% of you AGI. So if you earn $100,000, you can't contribute more than $50,000 in one year to, say, your church or the local boy scouts. And because not many people are willing to give away half of their salary, you don't hear much about this rule.

But if you donate capital gains property, your donation can't exceed 20% of your AGI. So in our example, $20,000 would be your limit on capital gains contributions.

If you were feeling philanthropic in 2003 and contributed more than 20%, the unused portion of that donation would've been carried forward, which means you can deduct it now on your 2004 tax return.

Note that excess contributions can be carried forward only for the next five years. Any amount unused after that will be lost.

The tax code can get complicated, so check out the "Carryovers" section of Publication 526 -- Charitable Contributions.

Too Much Social Security

If you switched jobs during 2004, you might've had too much Social Security tax withheld from your paychecks. The 2004 cap was $5,449.80. The problem is, when you start with a new company, HR has no idea how much Social Security tax was withheld from your previous job. As a result, your company just starts withholding as if you were at zero. So be sure to check your W-2s. If you had more than $5,449.80 withheld, you can claim a credit for the overpaid amount on line 66 of your federal Form 1040.

A Healthy Dose of Items

Here are a few more deductions that people frequently forget to include.

If you have a safe deposit box for your investments, you may be able to deduct the cost of the box as a miscellaneous itemized deduction. If you use the box to store taxable income-producing stocks, bonds or investment-related papers and documents, then you can deduct the cost, says the IRS. If you use it to store personal items, like jewelry, or any tax-exempt securities, forget it.

Remember, only the miscellaneous itemized deductions that are greater than 2% of your adjusted gross income are deductible, so every little bit helps.