Jean Chatzky responds to your tax questions

Also, the IRS has no income threshold you must reach in order to claim these deductions. In fact, your business could even lose money, and you'd still be allowed to claim them. After all, not every business venture is a moneymaker, especially in its first few years. However, if your painting business were to lose money several years in a row, your deductions could raise a red flag at the IRS and invite an audit.

If that were the case, an auditor would want you to prove that your painting business is indeed a business and not just a hobby. You would need to provide evidence that you are operating the venture as a means to make money. A few ways to do that are:

• Apply for a checking account and a credit card to use exclusively for your painting business
• Maintain good records of your income and expenses
• Actively market your paintings, and keep a log of your efforts
• Print up business cards and letterhead
• Join a professional artists association
• Subscribe to professional trade journals

Q: Any last-minute tips on how can I lower my tax bill?

A: As simple as it sounds, you need to make sure you're taking advantage of all the breaks available to you. That means maximizing your deductions and credits.

A deduction is anything that will lower your income, bringing you to a lower tax bracket.

Only on TODAY.MSNBc.com! Financial editor Jean Chatzky answers your questions about personal finance. LAST WEEK: Attention shoppers: Better service on aisle five GO TO ALL MONEY MONDAY COLUMNS

Credits are even more valuable than deductions. They lower your tax bill dollar for dollar. The per-child tax credit is $1,000 for this filing year (it phases out when adjusted gross income tops $75,000 for singles, $110,000 for couples).

Despite these freebies, some people don't take full advantage of the breaks the government has to offer. USA Today, for example, reported that many, many eligible parents with kids in college aren't taking advantage of the Hope Credit or Lifetime Learning Credit, which could be worth thousands of dollars a year. Among the other perks people often miss are deductions for:

• Student loan interest
• Points you paid getting a mortgage or refinancing
• Job hunting expenses
• Charitable contributions, including mileage you use when you volunteer

Last year's tax return comes in particularly handy in this exercise. Compare it to this year's to see if you've missed any deductions or credits you typically take.

Jean Chatzky is the financial editor for “Today,” editor-at-large at Money magazine and the author of “Talking Money: Everything You Need to Know About Your Finances and Your Future.” Her latest book, "Pay It Down: From Debt to Wealth on $10 a Day," is now in bookstores. Copyright ©2005. For more information, go to her Web site, www.JeanChatzky.com.

MORE FROM TECHNOLOGY & MONEY

Technology & Money Section Front

Gallery: Your latest splurges Facebook: ‘Why not give your ex another shot?’ Is Twitter the news outlet for the 21st century?   Advice on mortgage payments Get your ‘Thriller’ on YouTube   Stolen items up for grabs allDAY: Which TODAY anchor do you follow on Twitter?   What are your mileage points worth? Spears, DeGeneres Twitpic accounts hacked   Texting while driving worse than DUI? Technology & Money Section Front   Add Technology & Money headlines to your news reader: