26 December 2023

12 Tax Deductions You’re Likely Overlooking

By Ronald Smith

Did you know that when it comes to filing your taxes, there are some deductions that you might be forgetting? That’s right, there are ways you can save money on your taxes that you may not even be aware of. Let’s dive in and discover twelve deductions that could make a big difference in your wallet!

First up, did you know that you can deduct your state sales tax? It’s true! If you live in a state that doesn’t have income tax, you can choose to deduct the sales tax you paid instead.

Next, let’s talk about those charitable donations you made throughout the year. You can deduct the value of those donations if you have the proper documentation. Remember, every little bit counts!

Now, here’s a deduction many people forget about: job search expenses. If you’re searching for a new job in the same field, you can deduct expenses like resume printing, career coaching, and even travel costs for interviews!

Speaking of jobs, if you’re self-employed, there are a ton of deductions available to you. From home office expenses to business-related travel, make sure you’re taking advantage of every eligible deduction.

Are you a student or a parent of a student? Don’t forget about education-related deductions! You could qualify for deductions on student loan interest, tuition fees, and even education supplies.

If you’re a homeowner, there are deductions that could benefit you too. Mortgage-related deductions, like interest payments and property taxes, can save you a significant amount of money.

Now, let’s talk about medical expenses. Did you know that you can deduct some of your out-of-pocket medical costs? From prescription medications to doctor visits, make sure you’re keeping track of these expenses for potential deductions.

If you’re a teacher, you’re in luck! There’s a special deduction just for you. You can deduct up to $250 for classroom supplies you purchased out of your own pocket. That’s a nice bonus!

Are you a volunteer? You may be able to deduct some of your volunteer-related expenses, like travel costs or supplies you purchased for your volunteer work. It’s always worth looking into!

Do you have a home office? If so, make sure you’re taking advantage of the home office deduction. You can deduct a portion of your rent or mortgage, as well as utilities, based on the square footage of your home office.

Now, here’s a deduction that often gets overlooked: moving expenses for a new job. If your new job requires you to move a certain distance away, you may be able to deduct some of those expenses. Keep those receipts handy!

Last but not least, let’s not forget about tax preparation fees. Yes, you heard that right. The cost of having your taxes prepared by a professional can be deducted from your taxes. So, consider it an investment!

So there you have it, twelve tax deductions that you might be forgetting to take. Make sure to do your research, keep those receipts organized, and take advantage of every opportunity to save money on your taxes. Happy filing!

12 Tax Deductions You're Likely Overlooking

Oh boy, tax season… It’s that time of year when everyone starts to get a little nervous. It doesn’t matter what kind of job you have or how much money you’ve made, filing your taxes can be pretty overwhelming. But lucky for you, there’s a way to make it a little less stressful – by finding some deductions!

When it comes to filing your state or federal tax returns, a lot of people make the mistake of thinking they can’t claim any expenses. But guess what? There are actually a bunch of deductions that people forget about, and they can save you a lot of money. If you play your cards right, you might even get a big fat refund from the IRS!

So, to get you started, I’m going to tell you about some of the most common deductions that small business owners forget to take advantage of.

Don’t Forget These Deductions!

Sales and Income Tax

Let’s talk about some important deductions that people often forget to include in their tax returns. I’m here to help you save some money!

Did you know that you can deduct the money you’ve paid in state sales tax and income tax? It’s true! If you live in a state that has an income tax, you can claim every penny you’ve paid in taxes as a deduction. This includes both the money taken out of your paycheck and any additional taxes you might have paid. It’s like getting some of that money back!

On the other hand, if you live in a state that doesn’t have an income tax, you have another deduction opportunity. You can add up all the sales tax you’ve paid on your retail purchases throughout the year and deduct that amount from your taxable income. This can save you tons of money, maybe even hundreds of dollars!

And remember, these deductions apply to both things you buy for yourself and things you buy for your household. So don’t forget to include those expenses! They can make a big difference in how much you owe in taxes.

But wait, there’s more – Medical Expenses!

If you’ve had to pay for medical expenses this year, don’t worry! You can actually deduct some of those costs from your tax return. The things you can deduct usually include things like going to the hospital, getting prescriptions, and even choosing to have certain procedures. But here’s the catch – you can only claim these deductions if the total costs are more than 7.5 percent of the money you earned. And another thing to keep in mind is that you can only claim these medical expenses if your insurance hasn’t already covered or paid for them.

Childcare

Tuition Fees

When your kids are a little older, you can deduct up to $4,000 per year for qualifying tuition fees. This deduction only applies to higher education and can only be used for one dependent. However, you can also use it for yourself or your spouse. Just remember, if you’re married and file your taxes separately from your spouse, you can’t claim the deduction for tuition fees. This rule also applies if someone else claims you as a dependent on their tax return.

Student Loan Interest

Helping Others and Your Taxes

Did you know that when you help others, you can also benefit when it comes to taxes? It’s true! The tax man believes in karma too, which is why you can get some of your money back for any charitable donations you make. Now, you might think that these donations are usually small, so they don’t really matter. But let me tell you, every little bit counts. Whether you’ve baked cookies for a fundraiser or donated old clothes, you should definitely remember to deduct these expenses when filing your tax return. You’ll be surprised how much these small amounts add up!

Oh, and here’s an extra tip for you. If you’ve driven a long distance to help out a charitable organization, you can also claim back 14 cents for every mile you’ve traveled. Isn’t that great?

However, there’s something important you should know. If you want to claim a donation of more than $250, you’ll need to provide confirmation from the non-profit organization. This is to make sure everything is legit and above board.

Looking for a Job

If you’re searching for a job in a different field or if it’s your first time job hunting, you can still take advantage of certain benefits once you secure your dream job. You have the opportunity to deduct the expenses related to moving your belongings, including travel costs, parking fees, and toll fees. The only requirement is that you move at least 50 miles away from your previous residence.

Homeowners can also enjoy various savings opportunities. If you obtained a mortgage insurance policy after 2007, you’ll likely be able to deduct the amount you’ve paid on your insurance premium. Additionally, you can claim the interest paid on your mortgage points. If you’ve refinanced your mortgage, it’s possible to spread out these interest points over the course of your new mortgage.

Lastly, let’s talk about renovating your home.

Save Energy and Get Rewarded

Did you know that the IRS can actually reward you for making your home more energy-efficient? Yup, it’s true! And guess what? I’m here to tell you all about it.

So, here’s the deal. You can claim a deduction of 10 percent on costs up to $500. That means you can save some serious cash while also doing your part to save the planet. Pretty cool, right?

But wait, it gets even better! From now until 2016, you can actually claim up to 30 percent off select costs. That’s a big chunk of change! And what can you use this awesome credit for? Well, you can use it for things like installing domestic wind turbines, solar heaters, and geothermal heat pumps. Talk about innovative ways to save energy!

So, don’t miss out on this opportunity to make your home more energy-efficient and get some sweet rewards from the IRS. Start saving energy and money today!

Traveling in the Military

Gambling Losses

Did you know that even the taxman can be understanding when it comes to gambling? If you love playing poker, you have to tell the taxman about any money you win and pay taxes on it. But here’s the good news: if you’re not so lucky and you lose money, you might be able to get some of it back by claiming a deduction on your taxes. By claiming your gambling losses as a miscellaneous deduction, you can subtract the amount of money you lost from the amount of money you made.

Remember, this list of tax deductions is not complete! There are many more ways you can save money on your taxes. It doesn’t matter what you do for a living or how much money you make – there’s something out there that you can get a deduction for. You just have to do a little searching.