The article below is accurate for your 2018 taxes (the one that you file this year by the April 15th, 2019 deadline).
Tax season is almost over and you might be wondering if there’s anything else to help you out on taxes before you file. Though TurboTax has you covered and asks you simple questions to determine your tax deductions and credits, it’s always good to come prepared with knowledge of some of the more common ones so that you know the in’s and out’s of your finances. Here are five tax deductions for you to take advantage of!
Contribute to a Traditional IRA
You have until tax day to open and make a contribution towards a Traditional IRA. A contribution to a Traditional IRA is one of the few things you can still do to lower your taxes after the year has ended and still make an impact on your taxes you are filing now, so take advantage of it if you have not already done so.
When you make the contribution, make sure to indicate that it is for last year, otherwise, your broker will likely default to applying it towards this year. You can contribute up to $5,500 (or $6,500 if you are 50 and over). If you are self-employed, you can contribute up to 25% of your net earnings from self-employment or $55,000 for 2018.
Uninsured Casualty, Disaster, and Theft Losses
Prior to the new tax law, you were able to deduct most losses for uninsured casualty, disaster and theft losses. Under the new tax law, tax deductions for casualty and theft losses have changed for tax years 2018 through 2025. If you suffered a casualty or theft loss as a result of an unusual event like a flood, fire or some other unforeseen event, you can deduct the loss only if the casualty is within a federally declared disaster area or the theft occurred as a result of a federally declared disaster.
Keep in mind that when making the claim, you have to deduct any insurance payments you received associated with the loss. You also need to exclude any amount you received as reimbursement from your insurance company when you claim your tax deductions. If you were affected within a federally declared disaster area, you have the option of claiming disaster-related casualty losses on your federal income tax return for either the year in which the event occurred or the prior year.
Victims of the more recent California Wildfires beginning on November 8th are granted extended tax deadlines. This includes the 2018 individual income tax filing deadline and payments which would have been due on April 15, 2019, but have now been extended to April 30, 2019, for qualified individuals. If you were a victim of the recent California Wildfires and pay quarterly estimated income tax payments due on Jan. 15, 2019 and April 15, 2019, you will also receive an extension to pay until April 30, 2019.
Make Any Bad Investments?
If you have capital losses, where you sold an investment at less than the purchase price, you can deduct up to $3,000 of that loss and have it offset your ordinary income. To do this, you have to realize the loss by selling the investment. After you realize the loss, you need to offset it with any previously realized capital gains. If you still have losses, you can deduct them against your ordinary income. If you have greater than $3,000 in losses, you claim the $3,000 and carry forward the rest for use next year.
Charitable Giving Can Give Back
You may know contributions to charitable organizations are tax-deductible, however, our donation of time is not tax deductible. Did you also know that driving your car for charity can get you a 14 cents per mile deduction? Anything you may have purchased out of your pocket for a charitable organization also may be tax deductible. If the organization was having an event and you purchased balloons for them, remember to save your receipts because you may be able to deduct that purchase as a charitable contribution.
For contributions of $250 or more, you must get a written acknowledgment from the qualified organization indicating the amount of the cash and a description of any property contributed. TurboTax ItsDeductiible can help you accurately track and value your donations and then transfer them to your tax return.
No fooling, these tax deductions can really boost your tax refund, so don’t forget to claim them if you can!
Don’t worry if you forget something, TurboTax will ask you simple questions and give you the tax deductions and credits you’re eligible for based on your answers. Have a tax question? You can connect live via one-way video to a TurboTax Live CPA or Enrolled Agent with an average of 15 years’ experience to get your tax questions answered from the comfort of your couch. TurboTax Live CPAs and Enrolled Agents are available in English and Spanish and can also review, sign, and file your tax return.