Probably not a bad idea to give it a once over. If you do, consider some of these tax deductions and make sure you are taking full advantage. A little time reviewing could mean big dollars in deductions and then more return of your tax dollars.
Here are some of the more commonly overlooked tax deductions:
1. Points Paid on Home Refinancing
If you refinanced your home and paid points to get your mortgage, you can deduct those points gradually over the life of the loan. If you sold a home this year in which you had previously refinanced the loan and paid points, you can deduct all the previously undeducted points.
Here’s more information about deducting points on your refinance.
2. State Sales Taxes
You have a choice. You can deduct either state income taxes or sales taxes, up to $10,000 when filing your federal taxes. Therefore, if you live in a state that doesn’t have an income tax, you should definitely take advantage of the sales tax deduction. Of course, there are some states with low-income taxes and it’s not as easy to determine which is the better choice. Or you could have made some hefty purchases this year and your sales taxes are sky high. To be sure you’re taking the best deduction, plug your numbers in the IRS Sales Tax Deduction Calculator.
Here’s more information about state sales tax deductions.
3. Sales Taxes on New Vehicles
This deduction goes along with the previous one. If you bought a car, truck, or motor home last year you can potentially deduct the sales taxes paid. The IRS sales tax tables don’t include large purchases so if you use those tables to figure your sales tax, you can claim sales tax paid on vehicles as well. There are maximums, of course, and income limitations that apply.
Here’s more information on vehicle sales tax deduction.
4. Out-of-Pocket Charity
We all remember the big charitable contributions. It’s easy to dig back through our checks and receipts for those items. But what about the little charity efforts? They can add up over a year. Examples include food you purchased to make something for a non-profit, 14 cents per mile on any driving for charity, and child care for you to attend a charitable event.
Here’s more information on charitable contribution deductions.
5. Student Loan Interest
Most borrowers remember to pay this if they are making the payments. However, even if you are the parent of a child with student loan debt and you are making the payments, your child would be able to deduct up to $2,500 of the interest paid from their taxes.
Here’s more information about deducting student loan interest.
6. Jury Duty Pay
If you served on a jury this past year, and your employer took your jury duty pay out of your paycheck make sure you are getting that money deducted from your taxable income. If your employer didn’t reflect it in your W-2 then you need to claim it separately on your return.
Here’s more information on deducting jury duty pay.
7. Educator Expenses
Qualified educators get a sweet above-the-line deduction of as much as $250 for educations supplies and materials you bought last year. This includes supplies, books, and computer equipment. Teachers of k-12, aids, special instructors, and even the principal qualify for this nice deduction. Mrs. PT, a teacher, says it should be more than $250.
Here’s more information about deducting teacher expenses.
8. Continuing Education Expenses
The Lifetime Learning Credit is available to people taking continuing education classes that improve their job skills. You can claim 20 percent of your expenses up to $10,000 (max credit is $2,000).
Here’s more information about the Lifetime Learning Credit.
9. Travel Expenses for the Self-Employed
Recent tax reforms changed some deductions for the self-employed, but there are still many deductions you can claim. If you own a business or are self-employed, you can deduct some of your travel expenses, provided they were necessary. This includes mileage, airfare, rental vehicles, lodging, and meals.
Here’s more information on deductions for the self-employed.
10. Deduction of Medicare Premiums for the Self-Employed
People who run their own business after qualifying for Medicare can deduct Medicare Part B and Medicare Part D premiums. You can also deduct the cost of a supplemental Medicare policy or Medicare Advantage. In order to qualify you can’t be eligible for coverage under an employer’s health plan or spouse’s health plan.
Here’s more information on deducting Medicare premiums.
11. One Half of Self-Employment Tax Paid
Normally social security taxes are split 50/50 between an employer and an individual. However, if you are self-employed, you can’t split those taxes with an employer. You can deduct half of those social security taxes.
Here’s more information on self-employment taxes.
12. Weight Loss Programs
You can’t deduct a gym membership on your taxes, but if you’ve been diagnosed with a medical condition that requires exercise to treat your condition, you can deduct costs for a weight loss program. To qualify, A doctor must diagnose you with a specific medical condition and provide written documentation.
Here’s more information on deducting weight loss program fees.
13. Child Care Reimbursement
If you pay for child care while you work, you can qualify for a tax credit worth up to 35% of your childcare costs.
Another way to claim childcare is if both and your spouse work during the summer and you send your child to a day camp. This would count as child care and can lead to a tax credit.
Here’s more information about childcare deductions.
14. Personal Property Taxes Paid on Cars & Boats
If you pay property taxes on a car or boat, you might be able to deduct those costs. This is dependent on the state you reside in and would be reported as an itemized deduction.
Here’s more information on personal property tax deductions.