tax

Often Overlooked Tax Deductions

The Internal Revenue Service requires all citizens to ante up their share of taxes each year, but you don’t want to pay any more than necessary.

Here are some seldom notices tax breaks that may save you some money:

Ø      If you are seeking a new job in your present field, you can write off expenses, such as the cost of résumé preparation and employment agency fees.

Ø      If you are just beginning to enter the job market, and you moved more than 50 miles, you can deduct 23 cents per mile of the cost of getting yourself and your household goods to the new location.

Ø      If you are in the military reserve or the National Guard, and must travel for training exercises, you can deduct travel expenses, such as mileage, the cost of a hotel or motel and 50% of your meal costs.

Ø      Summer childcare and day camp costs can now be deducted. If you have a child who qualifies as your dependent, you can deduct expenses paid for a child care provider. Eligible child care programs include before and after school care and day camps, but overnight/sleepover camps are not allowed.

Ø      If you pay for the care for a parent, and your parent qualifies as your dependent, you can deduct the costs associated with caring for that person. Costs associated with in-home care and nursing home care qualify.

Ø      The Child and Dependent Care Tax Credit will allow you to write off up to six thousand dollars for expenses relative to the care of a child or adult dependent.

Ø      The Earned Income Tax Credit (EITC) applies to low income people, and also to those who have lost a job, taken a pay cut, or worked fewer hours. To get a refund from the EITC you must file a tax return, even if you don’t owe any taxes.

Ø      Educational expense deductions can help you take up to $4,000 off your taxable income.

Ø      A child can deduct up to $2,500 of student loan interest paid by their parents, if he or she is not claimed as a dependent.

Ø      Tax breaks for some energy-efficient home improvements are available under the Non– business Energy Property Credit.

Ø      You deduct either state and local income taxes, or state and local sales taxes. For most citizens the income tax deduction is the best deal.

Ø      You can deduct the state taxes you owed when you filed your 2016 state tax return. Include the amount with your state tax itemized deduction.

Ø      There is now a simplified home office deduction that may allow you to write off up to a $1,500 each year, if you work from home.

Ø      Miscellaneous medical costs, including travel expenses and insurance premiums can be deducted. Medical care expenses include payments for the diagnosis, cure, mitigation, treatment, or prevention of disease, or payments for treatments affecting the body. Payments of fees to doctors, dentists, surgeons, chiropractors, psychiatrists, psychologists, and nontraditional medical practitioners.

Ø      Payments for in-patient hospital care or residential nursing home care, if the availability of medical care is the principal reason for being in the nursing home, including the cost of meals and lodging charged by the hospital or nursing home.

Ø      When you contribute to an individual retirement account, or a workplace plan, you can get a tax savings for up to fifty percent of the first $2,000 you put into the account.

Remember, The Internal Revenue Service requires all citizens to pay income taxes, but you don’t want to pay any more than you have to, so be sure to take every tax deduction, credit or income adjustment to which you’re entitled.

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