Tax Deductions List
We understand- filing taxes may not be the most fun or desirable thing for anyone to do. Regardless, it is important to take the process seriously, especially when it comes to filing and claiming all federal deductions to which you may be entitled. Actually, claiming deductions is one of the simplest ways to save money, yet is so often overlooked due to lack of knowledge or attention.
Let’s take a look at the top ten commonly missed taxed deductions, and hey, maybe even you are eligible for a few.
Do you live in a state with no or little income tax? If you aren’t sure, it’s in your best interest to find out, and find out asap. Why? Because the IRS allows deductions for either state income OR state sales taxes. While most opt for prior, some may be better off deducting their state sales taxes from their burden- a number that could very well be higher.
First Moving Expenses
Moving out of the house is a big step, especially for new college graduates looking to start their lives. That’s why the IRS allows for first moving expenses to be on them- meaning all boxes, trucks, transportation, and other associated costs become tax deductible.
However, keep in mind here that there are some requirements- for one; you must be moving more than 50 miles away from home and two, must be converting into a full time job.
While most are aware of the tax deductions made on written checks or large charitable contributions, every penny matters when it comes to charity– both for them and for you. This means that regardless of the action, if you are working for charity, you may be incurring costs that are tax deductible.
So, be sure to file that written check, but also include the gas you used when driving to the volunteer site, or the ingredients you used to cook for the local shelter.
Jury Duty Pay
Missing work to serve on jury duty doesn’t have to be a burden, especially when it comes to money. If you served over the past year and had the money consequently taken out of your paycheck, be sure to deduct the amount from your income. You can also claim the money separately, if your employer did not reflect the amount on your W-2 form.
Child Care Expenses
If you are a parent, you realize how high child care expenses may be. Lucky for you, so does the IRS. And, child care expenses are extremely important to consider when it comes to claiming deductions. This is because child care costs aren’t actually entitled to be deducted, but credited.
Credits work to reduce your tax bill, while deductions simply reduce taxed income. That being said, while companies cover up to $6,000 of child care costs, an additional $1,000 can quality for credit- saving you even more money.
Energy Saving Home Improvements
As if the benefits of going green were not great enough, the government has given even one more incentive. If you recently installed an energy saving device into your home, you may be eligible for a deduction, or even a credit. A credit of 30% of the cost of installment, with a maximum of $1,500 over two years, can be claimed.
Need some ideas? Install skylights into your living room- adding appeal and natural sunlight to the house. Or install central air- reducing energy and making your home more comfortable for everyone.
If you are currently unemployed, taking the step to search for a new job can be rough, not only on your emotions but also on your wallet. However, the IRS allows for all costs associated with the new job search to be tax deductible. If you need to travel for an interview- deduct transportation and hotel costs.
If you are submitting your resume to web forums, deduct those associated fees. Whatever the case may be, get out there as much as you can, not only for the sake of increasing your chances for success, but realizing that your expenses can be tax deductible. The more you apply, the more you can deduct.
If you took advantage of the low rates and refinanced your home this past year, any points that you paid or pay can be deducted. The points are eligible to be deducted monthly and for the entire life of the loan.
If your medical expenses have exceeded 7.5% of your adjusted gross income, they can be deducted. Associated expenses, such as transportation fees to medical facilities, can also be written off. So if you or someone you care for has taken ill, make sure to take this deduction, because we all know how tough medical expenses may be.
Educators, including teachers K-12, their aides, and even principals, qualify for an above the line deduction of up to $250 for educational supplies. From books to computer purchases, all teachers should be aware and take full advantage of this deduction.
Thoughts on Tax Deductions
Now that you have reviewed our top ten missed deductions, consider all that you may be eligible for. If you’ve got them covered, good for you! If not, you could be on your way to saving more money than you think.
This guest post was provided by BackTaxesHelp.com, a website that helps taxpayers with various tax problems. Visit their site to learn more about income tax professionals, tax settlements, IRS installment agreements, and more.
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