Tax (Photo credit: 401K)

According to the IRS, each year millions of taxpayers overlook deductions and credits resulting in overpaying their taxes. Here are seven tips so you won’t become one of the statistics.

Section 179 Deduction. If your business acquired assets in 2011 either through a lease or by purchasing them out right, you may be eligible to deduct up to $500,000. For more information about this deduction, you can read the IRS publication “Bonus Depreciation and Increased Section 179 Deduction under the American Recovery and Reinvestment Act.”

Additional Bonus Depreciation. If you are a business owner, don’t forget you can write off 100% of qualifying new (not used) assets—including most software, vehicles, and equipment in general.

American Opportunity Credit. Do you have a child in college? Then don’t forget to claim the higher education tax credits. Under the credit, taxpayers can get a reduction in their tax bill of up to $2500 per student provided the tax filers have an adjusted gross incomes of less than $80,000 a year (if single) or $160,000 (if they file jointly). An eligible family with two kids in college could get a tax credit of $5,000. Best part about the credit is that it covers all four years of college. In order to get the credit, you will need to fill out IRS form 8863.The tax credit is set to expire at the end of 2012.

Student Loan Interest. If you are paying back your child’s student loan, and your child is no longer a dependent, your child is eligible to deduct up to $2500 of student loan interest you paid. However, parents can’t claim the interest deduction since they are not liable for the student loan debt.

Medicare Premiums for Self Employed. If you own your own business and are qualified for Medicare, you can deduct the premiums for Medicare Part B and Medicare Part D as well as supplemental Medicare (medigap) policies. According to Kiplinger, “you can’t claim this deduction if you are eligible to be covered under an employer-subsidized health plan offered by your employer.”

Retirement Accounts.  Taxpayers have till April 17, 2012 to set up a new IRA or SEP or add to an existing IRA and have it count for your 2011 tax return.

Small Business Health Care Tax Credit. Small businesses that pay at least half of your employees’ health insurance premiums may be eligible for a tax credit of up to 35 percent of the premiums paid. You can find more information at the IRS web site.

Mike Lockwood is President of TEQlease Capital,  a nationwide provider of equipment lease financing solutions.