Five Generally Skipped Tax Deductions
Most people over the age of 16 have heard of income taxes and almost all of those over the age of 21 fill them out every year. Very few of us forget the big deductions like property taxes, charity donations and mortgage interest. Some of us even remember student loan interest and the earned income tax credit. However, there are several tax deductions that are routinely overlooked. Mention these to your tax professional to make sure that if this deduction applies to you that you are getting the benefit.
State Sales Tax
If you live in a state that does not charge income tax, this benefit is of more use to you. For most of us, we have to choose between state and local income tax and state and local sales tax. If you live a in a state that doesn't impose an income tax, then this choice is made for you. Generally taking the income tax deduction is the best bet. If you purchased a large ticket item, make sure you check with your tax professional to find out which deduction would net your more money.
Child Care Credit
Like all other credits, this reduces your tax bill. Many people use their flexible spending accounts to pay for child care. These FSA accounts generally max out the amount you can set aside for child care at $5,000. These expenses cannot be claimed since they were deducted pre-tax. The tax law, however, allows you up to $6,000 to qualify. If you have paid more than FSA max and paid up to the ceiling, check with your tax accountant to ensure that you are receiving the full credit you deserve.
Moving Expenses To Take Your First Job
If you just finished college and have had to move over 50 miles to take your first job, you actually get to deduct $.19 per mile plus expenses to move. None of the expenses you incurred while trying to find that job can be deducted but make sure that if you are eligible to claim the expenses and get the deduction that you do so.
Refinancing Of Your Home
Many have had to refinance their homes since the economy took a turn for the worst in 2008. If you refinanced your home, you are allowed to deduct the points you paid in increments of the life of the loan. For example, if you refinanced your loan to a 15 year loan you can deduct 1/15th a year. While it may not seem like an awful lot, each little bit helps.
Charitable Contribution Expenses
Yes, we all know that charitable contributions can be deducted. But most of us don't know that you can claim the smaller expenses associated with the charitable contribution.If you drove to the donation center, you can deduct the miles. If you mailed out fundraising letters for your local non profit and you bought the stamps, you can deduct the cost of the postage. Discuss these with your tax preparer to determine what proof, if any, you will need to document your expenses.
Stella Brown is a writer who specializes in finance and economics. Stella relies on Grammarly grammar checker which ensures her message is conveyed in a clear and grammatically correct fashion.