Pay no more in income tax than you are required to. Let the tens of thousands of pages of tax code work in your favor for once and claim all the deductions you are entitled to, whether off the wall or not.

Here is a list of most overlooked tax deductions for Federal 1040 income tax filers:

1. State Sales Taxes. Not all states have a sales tax and it can be confusing if you qualify. That’s why it makes sense to File your Tax Return Online with TurboTax Online Federal Free Edition.
2. Reinvested Dividends. This was one I caught all the time when I worked in the accounting profession. When you reinvest dividends in a mutual fund, be sure to add that to your cost basis. Few people do this! (I personally do NOT reinvest for this very reason)
3. Charitable Contributions in other than money. 14 cents per mile for miles driven on behalf of a charity, even ingredients for those cookies you baked for the church bake sale.
4. Student loan interest that parents pay. If parents pay back a child’s student loans, the IRS treats the money as if it was given to the child, who then paid the debt. Therefore a child who’s not claimed as a dependent can qualify to deduct up to $2,500 of student loan interest paid by his or her parents.
5. First Job moving expenses. Job hunting expenses for a first job are not deductible but according to IRS rules, the moving expenses to get there are. Limited to a move more than 50 miles away. Your own vehicle mileage is deductible at the rate of 24 cents per mile.
6. Military Reserve travel costs. If you drive more than 100 miles from home and stay overnight for drills, meetings, etc, you can deduct 55 cents per mile , lodging, 1/2 of meal costs, parking and tolls. You do not need to itemize to take advantage of this deduction.
7. Child Care Credit. Some people miss this one if the payments are taken out of their paycheck at work. Be sure and include it.
8. Estate tax on a decedent’s income. Taxpayers get an income-tax deduction for the amount of estate tax paid on the IRA assets they received. Check with the attorney who worked on the estate.
9. State tax paid with your last year’s return. If you sent a check with your state tax return last year then remember to include that in the tax you paid to the state when filing your federal tax return.
10. Points for home refinance. If you bought a house during the tax year, be sure and have the closing information handy when you file your tax return. Points on a home purchase are deductible that year.  Points paid for a refinancing, though, have to be deducted over the life of the loan – so every year there will be a deduction, so don’t forget it!
11. Jury pay surrendered to your employer. If your employer paid your salary while you were on jury duty, chances are you had to give any jury pay to the employer. Be sure not to pay tax on that money you did not keep. The deduction goes on line 36 of the Federal Form 1040. Put “Jury Duty” on the dotted line or in the field in the tax software.
12. Property tax deduction even if you do NOT itemize. New in 2008, this often overlooked deduction allows you to increase your standard deduction by up to $1000 on a joint return ($500 for single) even if you do not itemize. Use Schedule L.
13. Casualty deduction for non itemizers in disaster areas. You can add the casualty loss to standard deduction amounts if you live in an area declared a disaster. Use Schedule L to claim this deduction.
14. Hope Credit renamed and expanded. The new for 2009 American Opportunity Credit will rebate up to $2,500 for each qualifying student for the first four years of college. The full credit is available to individuals whose modified adjusted gross income is $80,000 or less. Married couples filing a joint return need be $160,000 or less.
15. Making work pay. You may have seen reduced payroll withholding due to this program, but to actually claim the deduction you need to use Schedule M, also new for tax year 2009.
16. New vehicle sales tax deduction. More money to keep Detroit alive. If the purchase was after February 16, 2009 and before year end, you can deduct sales tax paid up to the tax on $49,500 of vehicle cost. If you are classified as “rich” per President Obama – over $250k income for married, $125k for singles – it is phased out. If you do not itemize, you need Schedule L.
17. Energy saving home improvement costs. 30% credit for qualifying home improvements that save energy, up from 10% last year.  Maximum of $1500 over 2 year period spanning 2009 – 2010.
18. Sale of demutualized stock. Usually regarding life insurance companies owned via a mutual ownership policy. Previously the IRS ruled this stock had zero cost basis meaning it was all gain. Now it is typically valued at issue time, nothing written in stone, though.
19. Home buyer credit. Get you cut of the real estate bail out here. Was “first-time” home buyer, then redefined to include others deemed “long time” homeowners. If you bought a home in 2009, pay careful attention to all the details to get your maximum benefit.

The best way to avoid missing out on an important and valuable tax deduction is to have all of your documentation on hand and then File For Free Online With TurboTax Federal Free Edition.