I was just going through some files and discovered some old receipts from business expenses I forgot to deduct when I filed my 2004 taxes (I'm self-employed). Can I deduct these expenses on next year's taxes so I can finally get credit for them?

If you spent the money in 2004, you'll need to deduct the expenses on your 2004 taxes -- you can't just add them on to next year's return. But it isn't too late to make a change to your 2004 tax return and possibly get an extra refund.

You have up to three years after the original due date of your return to file an amended return if you've made a mistake or left something out. That gives you up until April 15, 2008 to make changes to your 2004 return. To make the change, print out Form1040x and fill in the numbers from your original return and then the changes you're making. You'll also need to submit a new Schedule C because you're adding additional business expenses. And contact your state's department of revenue about amending your state income-tax return, too.

Before you make the change, though, keep in mind that it could affect other areas of your finances. Adding more business expenses, for example, will lower your self-employment income and may decrease the amount of money you could have contributed to a small-business retirement account in 2004 (see Do-It-Yourself Retirement Plans for more information about the contribution limits).

If you'd need to take back some of the contributions, adding the extra business expenses may not be worth the hassle (and may not save you quite as much money as you'd expect because you're giving up some tax-deductible contributions). Calculate the tax savings yourself before deciding to submit the amended return.

MORE: Kiplinger.com | Your Money | Taxes | Column

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