Seeking Out Tax Breaks

This filing year, with money tighter than it has been in decades, we can all benefit from seeking out that extra cash. That being said, potentially millions of dollars in tax breaks are ignored every year.

So this week, I've compiled a list of the deductions, credits and strategies that can put more money in your pocket. Find the situation that fits you best below, and watch your savings add up.

If you're not making as much as you used to: Your lower income may open the door to convert assets in a traditional IRA to a Roth IRA. The rules state that you can only convert to a Roth in a year in which your adjusted gross income is less than $100,000, and you have until your tax-filing deadline to do it. If you own a business and experienced a loss, or were receiving deferred compensation that has run its course, or even have retired but aren't pulling in much taxable income from your nest egg -- you may qualify. And the benefits can be significant. Say you're 50 and the value of your IRA is as low as it's ever going to be. You could let the money remain in the account, rebound to its prior value -- as we know it eventually will -- then let it continue to grow until you are 70 1/2 years of age and are forced to take distributions at your current tax rate. Or, you could pay the taxes now at your current rate (which is lower because you didn't have an especially profitable year), and then never have to pay taxes again. The downside to a conversion: You can't pull the money out of the Roth for five years. But note: You don't have to convert your entire IRA, you can simply convert an amount you're comfortable with.