Don't give the IRS more than it deserves
Christy Heady • Bankrate.com

Tax season is full of perils. Americans commonly overlook available deductions and pay more than they owe!

To avoid costly missed deductions, check last year's tax return for any charitable donations, stock losses or the like from previous years that you can carry forward.

Other often-missed deductions? Well, if you sold a house last year, make sure you deduct the portion of the year's real estate taxes you paid at closing. It's easy to forget. The payment is recorded in the closing statement but becomes part of the final exchange of money -- you don't write a separate check.

And, if you cashed in certificates of deposit, remember to deduct any early-withdrawal penalties you paid. You can deduct them even if you don't itemize your deductions.

If you are itemizing, make full use of the spot for "miscellaneous expenses" on your Schedule A. This is where you record employment-related education, subscriptions to professional and trade publications, 50 percent of business meals and entertainment, union dues, job-hunting expenses, fees for professional investment advice, tax-preparation costs and even calls to the IRS. But there's a catch: You have to add these expenses together and you can deduct only the portion that exceeds 2 percent of your adjusted gross income.

If your employer reimbursed you for the cost of business travel, can you deduct the cost? Nope -- reimbursed business, medical and casualty loss expenses are not legal deductions.

So you can overpay by missing deductions. What else? Well, you can also overpay if you don't monitor your payroll deductions. Case in point: If you worked more than one job in 1999 and earned more than $72,600, you may have paid too much in Social Security taxes. The instructions on your 1040 form will tell you how to claim a credit for the amount you overpaid.

Of course if you're missing tax forms, download them at the Internal Revenue Service Web site.

Other things to keep in mind:

• File a Form 4868 for an automatic four-month extension if you can't make the filing deadline. But attach a check for the amount you expect to owe. If you underpay, you'll owe 8 percent interest on the shortfall -- the clock starts April 15^th.

• Online stock traders: Keep good records! If you have bought and sold stocks or funds on the Internet, you could have a tough time calculating your gains or losses. Online brokers are only required to provide details when you sell, not when you buy.

• If you need help, visit the IRS Web site, or call the agency toll-free at (800) 829-1040.