Here are some favorite tips from tax preparers

By Martha McNeil Hamilton
Washington Post

We asked tax preparers for some their favorite tips, and here's what we got:

• The paycheck.

The last paycheck stub of the year includes potentially useful tax information not included on your W-2. For instance, it may include information on what you paid in union dues and charitable contributions made through a payroll checkoff.

• You save what you drive.

When it comes to taxes, fuel-efficient hybrid vehicles such as the Toyota Prius trump SUVs make a difference. You can deduct $2,000 for the purchase of a gasoline-electric hybrid vehicle.

• Mom-and-pop operation.

You may not be able to claim your retired parents as dependents, but you may be able to claim their medical expenses. If they are citizens or residents of the United States and you pay more than half of their support, including medical expenses, you can claim those medical expense as yours.

• Bondage.

Most bond buyers make their purchases between interest-payment dates. As a result, the buyer typically pays the seller the amount of interest accrued between the last interest payment and the purchase. When the next interest payment rolls around, the full interest payment is reported as income to the buyer who now owns the bonds. The buyer should factor out the amount of interest paid the seller at the time of purchase.

• One Armani, two Armani...

If you donate similar items worth more than $5,000 to a charity or charities, the value of the items must be appraised in writing for you to claim the deduction. Usually charities are aware of this provision and can help you with the appraisal.

• Grade expectations.

Under the Coverdell education expense provision, parents who are single filers with adjusted gross income of up to $110,000, or joint filers with AGI of up to $220,000, can set aside up to $2,000 a year in an education savings account that will accumulate earnings tax-free. That's up from an earlier limit of $500. And the money may be used for pre-college expenses such as private-school tuition, books, and computers and software if they are required for school.

• Call the real estate agent, honey, we're having twins.

In December, the IRS issued guidance about the exclusion from taxation of income from home sales, including definitions of the "unforeseen circumstances" under which taxpayers are eligible for the exclusion even though they have not lived in the home for two of the past five years. Along with such bad news as death, divorce and unemployment, they include multiple births.

• Not working? More time spent on your tax returns.

And those job-hunting expenses, such as preparing a resume and sending out letters, are deductible as miscellaneous itemized deductions as long as your miscellaneous itemized deductions exceed 2 percent of adjusted gross income.

• Working two jobs? You can't afford to pass up deductions.

If you take on a second job as a self-employed person, you may be able to write off up to $24,000 worth of equipment and furniture for your home office.

• Who says teaching doesn't pay?

As of this year, teachers, teachers' aides and principals may be able to deduct up to $250 of expenses paid for purchases of books and classroom supplies even without itemizing deductions.

• Another good reason for keeping your own name.

If a newlywed takes her husband's name and doesn't tell the Social Security Administration, IRS computers will not be able to match the new name on the tax return with the Social Security number. Getting divorced and discarding the name? You could run into the same problem.

• The state giveth and the Feds taketh away.

Remember that state tax refund you felt so good about last spring? It's taxable.