Don’t Miss these Tax Deductions!

April 15 is a much-loathed date for many taxpayers while others look forward to their refunds. There are many deductions and tax breaks that Americans miss out on. Don’t allow the government to keep more of your hard-earned money. Here are some ways to keep more cash in your pocket or maybe even get a refund.

Fees from tax preparers

This is one of the most commonly missed tax deductions. If you paid someone else to do your taxes for you or used income tax software, you can deduct that cost in your tax return.

Qualified capital gains
Some capital gains, from selling a stock at a higher price than what it was purchased at, are taxed at a lower rate or not at all. Do not automatically add all capital gains as income.

Medical and dental expenses

If your medical and dental expenses exceed 10 percent of your adjusted gross income, then they can be included in your tax return. These include medical tests, medical devices, health insurance premiums, prescriptions (but not vitamins) and travel expenses incurred to receive care. If you have a child who is disabled ad has to attend a special needs school, you may be able to deduct the tuition fees as well.

Child care credit

If you have children under the age of 13 who attend daycare, you can receive a credit toward the expenses. Parents of one child can receive a $3,000 credit toward childcare expenses, while parents of more than one child are eligible to receive up to $6,000. The other requirement is that both parents must work or one parent must be disabled or a student.

On a child related note, there is a considerable deduction for expense related to adopting a child during the tax year.

Tax Deduction

College tuition

There is a deduction for college tuition as well as books and other related expenses.

Expenses for care of a parent

If your parent is elderly and/or disabled, is considered your dependent and you pay for his or her care, you can deduct expenses such as long-term care and nursing home expenses.

Charitable contributions

If you forget to keep track of the different amounts you paid to charities throughout the year, you are allowed to claim up to $250 without a receipt. Anything beyond that requires proof. Besides monetary donations to charities, many people do not know that you can also claim mileage for charity functions (14 cents per mile) or out-of-pocket expenses, such as supplies for a bake sale or other fundraiser. If you have charitable contributions taken out of your paycheck, don’t forget to include those as well.

Job search expenses

If you were laid off or quit your job, you can claim expenses related to your job search. This can include resume preparation services, printing and advertising expenses, job counselors, recruiter fees, mileage to interviews and job workshops and overnight travel.

Job-related moving costs

If the job search paid off and you got the job of your dreams many miles away, don’t fret: you can deduct most of the moving expenses. These include the costs associated with hiring movers and moving trucks, as well as mileage and lodging. However, your new job must meet two requirements: It must be 50 miles further away than your old job was from your home. In addition, after the move, you must work at your new job for at least 39 weeks within the first year.

State sales and income taxes
Some states have no sales taxes, while others have no income taxes. Some have both. When filing your tax return, you have the option to deduct either sales tax or income tax. Income tax is typically the bigger amount, so that would be the preferred choice for many people.

Interest on a mortgage

You cannot claim interest paid on auto loans and credit cards, but you can deduct the interest you pay on your mortgage. Mortgages under $1.1 million qualify. You can also deduct points paid on a new mortgage or a refinance.

Gambling losses
If you won a large amount of money hitting the slot machines, but then hit an unlucky streak and lost a ton of money, you can claim your losses against your winnings.

Theft losses

Loss of assets caused by accidents or acts of god can be claimed on your tax return. These can include vehicle damage caused by a car accident, the loss of a home due to a flood or trees that burned down because of a fire.

Alimony payments

The silver lining in having to pay your ex alimony is that you can deduct it from your tax return. However, child support payments are not tax-deductible.

Teaching expenses

Teachers who buy supplies for their classroom out of their own pockets can deduct up to $250 of expenses on their tax return. These expenses my include stationery, books and computer software.

Deduction for the self-employed

Those who have a home business can deduct expenses related to the operation of their business. Those who work from home in an office can deduct office expenses as well as a portion of the electricity bill based on the size of the office. They can also deduct medical and dental insurance premiums, as well as travel expenses.

Be Sociable, Share!

Leave a Reply

Your email address will not be published. Required fields are marked *