10 Commonly Overlooked Tax Deductions
Tax deductions and credits can save you tons of money at tax time, but many taxpayers miss them because they don’t realize things they do on a daily basis can lower their taxable income. You have over three months before the tax filing deadline, and if you’re in need of motivation, we have 10 money-saving tax deductions (and credits) you don’t want to overlook this season. They just might motivate you to get started today!
- Education Expenses: Tuition is deductible for full-time students, but even casual learners can get a tax credit. Taxpayers taking a full course load and working toward a degree can receive education benefits through the American Opportunity Tax Credit for college expenses.The Lifetime Learning Credit of 20% of up to $10,000 of tuition and fees is available even if you aren’t pursuing a degree.
- Job Hunting Expenses: If you were looking for a job last year, you may be able to deduct the cost of travel, meals, resume preparation, postage, career counseling and employment agencies, to the extent that they exceed 2% of your income, even if you don’t end up changing jobs.
- Gambling Losses: Unlucky taxpayers should know that losses can be deducted if they itemize their deductions. Keep in mind that your losses cannot surpass your winnings, which must be reported as taxable income. Be sure to collect documentation such as receipts, tickets and other records to support your losses.
- Personal Bad Debts: If your best friend borrows $10,000 from you and then skips town, you can deduct up to $3,000 of this non-business bad debt as a short-term capital loss on your tax return in the year the debt becomes uncollectible.
- Moving Expenses: Your moving expenses are tax deductible if you change jobs and the distance from your old residence to your new job site is at least 50 miles more than to your old job site, and you work at least 39 weeks during the year after the move.
- Party Expenses: The cost of parties are tax deductible if they are related to your business. If you rewarded your favorite customers with a party you may be able to take this tax deduction.
- Home Office: If you use part of your home regularly and exclusively to perform administrative or managerial activities for your business, you can claim a home office deduction for utilities, rent, mortgage interest, depreciation, cleaning and the like based on the square footage of your home used for your business.
- Points Paid on your Home Loan: If you paid points when you bought a home, they are deductible in that year. Points paid to refinance a loan must be written off over the length of the loan. If you refinance again, don’t forget to write off the remaining points in the year you refinance.
- Mileage Expenses: If you use your vehicle for business, whether you are self-employed or an employee, you can deduct your mileage (53.5 cents per mile in 2017). If you work at more than one job, the cost of traveling between job locations is tax deductible as well.
- Medical Costs: The cost of exercise equipment or purchasing and maintaining a spa or swimming pool can be tax deductible as medical expenses if your doctor recommends them in writing.
Our tax professionals here at Williams Accounting & Consulting will ask you simple questions about your life to help you claim the tax deductions and credits you’re eligible for based on your entries. Williams Accounting & Consulting will also check for more than 350 deductions and credits so that you can keep more money in your pocket! Get started now!