Did you know that there's a big chance that you might be overlooking some tax deductions which you may qualify for especially if you file your taxes yourself? In this post, I'm sharing some of the most commonly overlooked tax deductions that you should keep in mind when you are filing your taxes so you don't leave any money on the table.
Commonly forgotten tax deductions and credits
1. Your tax preparation fees
You might qualify to deduct the cost of your tax preparation as long as this deduction is for the year in which you paid for the tax preparation.
2. Contributions to charity and/or volunteering at a charity
If you gave to money to a charitable organization as a donation, you can write this off on your tax return. In addition, if you volunteered at a charity and incurred mileage or travel expenses as a result, you might be able to include these costs as a tax deduction.
3. Child-care costs
If you have a child or dependent under the age of 13, you may qualify for a tax credit on your costs for daycare, having a babysitter or au pair, summer camp etc which could add up to 35% of qualifying expenses up to $3,000 for one child or dependent OR up to $6,000 for 2 or more children or dependents.
4. Uniforms for work
Work at a job where uniforms are required? You may be able to claim a deduction for the amount of money you spent on your uniforms and also on laundering services if your employer does not offer a reimbursement.
5. Sales tax or income tax
You have the option of deducting your state and local sales tax OR your state and local income tax which you paid over the year. What makes most the sense for you would depend on where you live and how high or low your state income tax or your state sales tax is. For example, if your state income tax is very low (or there is not at all), it might make more sense for you to deduct the sales tax. Be sure to have records!
6. Mortgage interest
If you own a home, you are eligible to deduct the interest you paid on your mortgage as long as the loan was $1,000,000 or less.
7. College credit
You may qualify to claim a Lifetime Learning Credit for any or qualified tuition and associated expenses paid for students enrolled in eligible educational institutions as long as your income is less than $65,000. This credit is worth up to $2,000 per tax return per year. This applies to for qualified education expenses you pay for a dependent child as well as for yourself or your spouse.
8. Investment fees
All of your investment related expenses such as commissions paid to brokers, custodial fees and other investment related expenses can be filed as deductions on your tax return.
Be sure to check the IRS guidelines or talk to your tax preparer for specific details before you file any of these deductions to ensure that you meet the qualification requirements. It's also important that you have proper documentation and records for any deductions that you file for.
Getting a tax refund? Check out this blog post on how to plan out that money.
Here's to NOT leaving any money on the table!