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January 10, 2008


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Sorry, I don't understand #12, reinvested dividends. How do you figure this to be a "subtraction that can save you money"? I have a lot of these and haven't noticed Turbo Tax handling the reinvested dividends differently than ordinary income.

I use 5 (don't forget all the driving you might do in volunteer work - you can just add up the miles) and 10. Here in PA we have a ~3% state income tax. The sales tax is ~6%, but doesn't include food or clothing, so we pay more in state income tax than in sales tax.

Phil --

Did you click through to the Kiplinger article and read the details on #12?

That's the one that caught my attention too Phil, but it's not the dividend tax they are talking about it's the capital gains tax if people count reinvested dividends as zero cost basis instead of dividend received/new shares bought.

Reinvested dividends aren't really a deduction, they are an increase of basis when you sell the underlying securities. Calling it a deduction is a bit of a stretch, in my opinion.

Beware of #5 as it is subject to new rules this year as far as support for the deduction. Basically you have to have some kind of receipt from the charity. Hard to do when you're dropping a few bucks into the bellringer's kettle at Christmas time.

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