8 Most Missed Tax Deductions

Tax Deductions and Credits arrows missing target

Each year at tax time we look to see how we can reduce our tax bill. Anyone who has filed a return for more than a few years is well aware of the usual suspects, the most common itemized deductions that hit our Schedule A – Mortgage Interest, State Income Tax, Real Estate Tax, and Charitable Donations.. Today, let’s look at the tax deductions that are frequently missed and see if we can save you just a bit more on your 2012 return.

Points – You may know that points you pay on a mortgage to buy a home are deductible. On a refinance, however, the points are taken over the life of the loan. What’s often missed on a subsequent refinance, you should then take the remaining dollar value of points from the prior refinance.

Rent – Can’t be deducted on your Federal Tax Return, but a number of states allow for a partial deduction.

State Sales Tax – This deduction has been available for only a few years, and is most welcome to those who live in a state with no income tax. The IRS allows you to choose between an amount based on income, or actual sales tax paid, which can be substantial if you’ve made some high ticket purchases.

Charitable Donations – Did you know that if you volunteer for a charity that, in addition to cash or goods donationated, you can deduct 14 cents per mile that you drive to help the charity out. For those who support a food bank with weekly visits, for example, this deduction can add up over the year. Be sure to keep notes for the dates you volunteered and the miles driven each day.

Are you a Teacher? Keep your receipts if you’ve purchased any supplies for your classroom. You can deduct up to $250 even for those who don’t itemize.

Medical Expenses- Tax deductions to the extent they exceed 7.5% of your Adjusted Gross Income (AGI). Some items that are easily missed: mileage – a deduction of 23 cents per mile for medical purposes. For those who have frequent visit to the doctor or clinic, this can add up. Equipment for disabled individuals, including items such as crutches, walkers, and orthopedic shoes. Any changes you make to your home to accommodate an elderly or disabled person is deductible less any value such renovation adds to the house.

Energy Saving Home Improvements – a number of improvements made in 2012 count toward the Residential Energy credit. Included are such items as energy efficient windows, doors, and roof. Also on the list is insulation, and new heating or central air conditioning. We’ll discuss this in greater detail in an upcoming article, so you’ll be an expert on this topic.

Credit for Retirement Savings Contribution – Couples filing jointly with an AGI up to $57,500, or Singles up to $28,750 can receive a credit up to $1,000 per person if they make a contribution to an IRA account during the year. The amount varies based on income, and the credit itself can be as high as 50%, a great motivation for lower income earners to find spare cash to fund their IRA.

TurboTax will ask you the necessary questions so that you get these tax deductions and credits if you’re eligible.  If you have questions, remember only TurboTax allows you to speak to tax experts who are CPAs, IRS enrolled agents, and tax attorneys.

Comments (14) Leave your comment

  1. I’m trying to file my taxes for last year of 2015 I was very satisfied however I’m not able to log on because I can’t remember my password can we use my phone to send me a message so we can reset it for Yahoo can you please text it to me song cell phone

  2. I became disabled 10 years ago. I owned a business downtown but always filed jointly with my husband as a DBA. My illness was serious and the only treatment at the time was experimental which insurance wouldn’t pay at $9,200 per month. We kept taking loans against our house and cars. In 2010 we owed $108,00 more on our home than it’s appraisal. We were lucky enough to sell my store to someone who could only do it with me financing it- but they would be able to pay me monthly for 15 years. We filed a Chap 13 and moved 30 miles closer to my husbands work so he could come home during the day to help take care of me. We could not afford the prescribed home nursing.
    The bankruptcy court determined how much money we could live on- not understanding that I have large Dr and medical bills every month. I cannot get disability because with the med deductions my husband and I took for two years kept me under the mandatory $4,000 per year income required to receive benefits. One year after filing bankruptcy, the IRS billed us for $53,000 in taxes for the sale of my store- even though I didn’t receive one penny at closing !
    I am trying to make payments to the IRS each month. My 65 year old husband took a 2nd job and cannot help me during the day or evening (toilet, feeding,etc). I cancelled most of my therapies which were lengenthing my life and giving me pain relief. And my husband had to cancel our life insurance, dental insurance, and other benefits.
    Are there any tax benefits or relief for people like me? We cannot afford a lawyer or tax counselor. Any help you might know about would be so appreciated.
    Starkville, Mississippi

  3. My Husband and I have been trying to finish up our taxes for this year still but could not locate and finish it up to send it out. We were almost finished with it and only needed a couple of things to put in. And send out. How can we find our return?

    1. Hi Babara,
      If your tax return was complete by the October 15th deadline and you didn’t use the Free edition your information can be retrieved. If your tax return was not complete by the deadline unfortunately TurboTax online for tax year 2012 was taken down as the IRS is no longer accepting e-filed tax returns for tax year 2012. You can download TurboTax 2012 and complete your tax return and print and mail it in.
      You can access downloads here https://shop.turbotax.intuit.com/personal-taxes/past-years-products.jsp
      Here is more information for you:
      Thank you,
      Lisa Greene-Lewis

  4. Does the new tax code program cover gay marriage at the federal level when your home state does not recognize the marriage?

  5. Can not get on line. I do not remember my password and have tried to reset so many times, that I am totally disgusted. HELP. Have taxes inputed and all I need to do is hit send.


  7. what good is a child dependent of 3800 dollars and you cant use none of it and you taken care of this child over a year the child is 3 years old

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