Most Overlooked Tax Deductions
I know most people want to pay their taxes honestly – they’re not looking to cheat the system. However if they qualify for a tax deduction that can lower their obligation or even increase their tax refund, 99 out of 100 times they’ll take it. The problem is that sometimes even with the best intentions tax filers can overlook legitimate tax deductions that they are entitled to. I can fix that problem with today’s article.
Overlooked Tax Deductions
I’ll share a few overlooked tax deductions that people miss out on. I’ll group them by family, home, and finally business. I hope it makes it easier for you to find a deduction you can claim next time you file your taxes.
It always starts at home, right? The good news is that taking care of your family can be a tax benefit come tax time.
- Personal property taxes: You may have received a state and local tax bill during the year for your personal property like a recreational vehicle. While it’s a chunk of change out of your budget, the good news is that state and local property taxes related to personal property is tax deductible.
- Medical expenses: You claim the amount of your medical expenses that exceeds 7.5% of your adjusted gross income. Double check to see if you’re overlooking anything. This tax season families with new babies may be able to deduct breastfeeding supplies like a breast-pump.
- Charitable contributions: Many of us keep receipts for charitable donations, but did you also include the supplies you’ve spent helping a non-profit organization?
Did any of the tax deductions mentioned above surprised you? Since we had our little girl this summer I’m happy about breast pumps being included for medical expenses.
We spend so much time at our beloved homes. The roof over our heads can be an even bigger benefit when you consider some of the tax deductions overlooked.
- Moving expenses: If you had to move into a new place due to a job, you may be entitled to a deduction on your moving expenses. You have to meet the distance and time guidelines as outline by the IRS.
- Refinancing points: If you refinanced your house this past year, you may be able to deduct a portion of your points (it’s spread over the length of the loan). If you have a 15 year mortgage, you can deduct 1/15 of the points each year. Points are pre-paid interest paid to the lender by the borrower to obtain a mortgage loan. This interest can also be called loan origination fees, maximum loan charges, discount points, or loan discounts.
- Casualty-loss deduction: If you’ve been affected by one of the weather related disasters that happened this past year, you may qualify to get a tax deduction on your loss.
Don’t forget to look at your home mortgage interest you’ve paid as well. It can be a big deduction for some people.
Whether you are looking for work, are working from home or at a company, there are some deductions that you need to be aware of.
- Home Office Expenses: I was surprised to learn that some entrepreneurs put off including their home office expenses with their deductions to ‘be on the safe side’. However if you’re entitled to it, you should claim it. Make sure you keep good record and you shouldn’t have a problem.
- Cell phones: If you have a cell phone used to handle business matters that bill could be tax deductible.
- Journals and Newspapers: Depending on whether or not your subscriptions are job related, this is another overlooked deduction.
What other business related tax deductions do you think you qualify for?
Tax Software to Your Aid
This is a big reason that we use tax software for filing. It’s another set of eyes that can guide you towards the legal tax deductions and credits that you already qualify for. Every year tax laws change and it’s extremely hard to keep up to date with all of these changes.
Thoughts on Tax Deductions
I’d love to hear your thoughts on getting the tax deductions you deserve. How many of you itemized your taxes last year? What deductions did you take? What’s your tax situation this year? Do you qualify for more tax deductions or less?