10 Most Commonly Missed Tax Deductions
Tax time is fast approaching and soon everyone will be either updating their TurboTax files or going to their local H&R Block office. The problem is that many people view this simply as a process and not as an opportunity. They are in such a hurry to finish their taxes that they end up missing tax deductions and leaving money on the table. With effective planning throughout the year, you can take the appropriate steps to catch these mistakes, and maximize your return.
The 10 Most Commonly Missed Tax Deductions
1.Medical expenses. When it comes to missed deductions, unclaimed medical expenses are at top of the list. There are so many facets of this, that it hard to list them all. Basically, if your doctor prescribes a treatment, then most expenses associated with that treatment (up to the appropriate level) are eligible. Even travel expense, or costs to cover family member assistance, if need.
2. Charity. Direct charity donations aren’t typically missed, but the associated expenses are missed more often than not, such as mileage. In addition, many taxpayers forget that some charity contributions, such as United Way, are often deducted from their payroll, so they have to remember to count that.
3. Credits for energy-saving home improvements. While most of the tax credits for energy saving home improvements have expired, there are still many that exist through 2016. So why not do some research and find a home improvement that qualifies?
4. Refinancing costs. The deduction of these costs are not as sexy as deducting the points when you purchase a home. You have to spread it out over a longer period of time, but that’s fine. It adds up, and it’s your money.
5. Childcare. This one is better than a deduction, it is a credit. That means that it reduces your actual tax for each dollar that you are eligible for. Where most people do deduct something for their children, they often don’t maximize their expenses and quantify the full amount.
6. Self-employed expenses. If you own your own business, you should be looking for any way possible to deduct work related expenses. For example, if you travel for business and you have to pay a baggage fee, claim it.
7. Career Finding. If you have been out of work and are looking for a job, you can deduct the costs involved which your job hunting. This one is overlooked simply because people do not track this that often.
8. Relocation costs. Okay, so you found a job of your dreams, but they are making you move across the country to head up their office in Montana. No problem, you can start to deduct any of the costs involved with relocation.
9. College Expenses. A lot of adults are going back to school to either finish their degree or advance their degree. There are tax credits associated with the costs of going back to school, and they should be taken advantage of.
10. Student loan interest paid by parents. If you have children in college or that have recently graduated, you may be making their student loan payments for them. If so, the interest paid is deductible. This is often missed.
This article makes no claims or offers regarding tax advice. These are simply suggestions and you should contact your tax professional for advice on your particular situation.