Preparing for your tax return can be time consuming. You also need to make sure that you are accurate with your numbers and data to avoid having problems with the IRS. This is why it’s important that you start preparing ahead, so you’ll have more time to double check your files. Moreover, doing so will let you ensure that you maximize your deductions.
Here’s some of the most common tax deductions that a lot of people forget to include when filing for their tax. Avoid making the same mistake and get the most out of your returns by making sure you have them added to your files.
1. Contributions Made to Charitable Institutions
Extending your hand to charitable institutions is a great thing to do as you get to help their beneficiaries. Whether you donated cash, prepared meals or drove to their place to offer your free service, the amount you spent can be included in your tax deductions.
2. Tax Credit for Child Care
If you pay for child care because of work, you may be eligible to get up to 35% tax credit. However, if you have a reimbursement account for child care provided by your employer, you may not be able to get the tax credit. This child care reimbursement account is used for paying for child care, so you can only choose between the two.
3. Expenses Incurred from Moving to Your New Place for Your First Job
If you got your first job and you need to relocate, the expenses you incurred for moving is deductible. However, that’s only if it’s your very first job. Moving to a new place for a new job is not included. Moreover, expenses you incurred for job hunting are non-deductible.
4. Interest on Student Loan Paid by Parents
Your parents paying for your student loan can be a huge relief, as it’s another problem lift off your shoulders. This is not the only good news, because you can include this on your tax deductions. As long as you are no longer a dependent of your parents, you may take advantage of this deduction.
5. Expenses Incurred When Looking for a New Job
Fresh graduates who are looking for a new job do not qualify for this deduction. However, if you’ve been employed before and you’re looking for a new job, the expenses that you incurred during the process can be added on your deductions. It doesn’t matter if you were hired or not. Some of these expenses include cost of travel, placement fees, as well as expenses incurred for sending resumes.
6. Medical Expenses
Most people know that usual medical expenses not covered by their insurance, like hospital bills and doctor’s fee, can be deducted. However, what many people miss are the deductions that they may get from lodging and travel expenses due to medical procedures made out of town.
7. Losses Due to Disaster or Theft
Theft and disasters are things that you don’t want to experience. But sometimes, they just happen. If you experienced such devastating situation, losses you incurred may also be added to your deductions. These may include fire, flood, storm and automobile accident.
8. Deductibles for Self Employed
If you’re self-employed, half of your tax can be deducted. This is also true with your health insurance. Regular employees get their health insurance tax free from their employers. This is why you may also deduct up to 60% of your premiums, being self-employed.
You may get a tax credit if you’re sending your kids to school. If you decide to enroll in a course or class in order to enhance your skills on your current job, this may also be added to your deductions.
10. Make Parents as Your Dependents
If you’re the one supporting your parents, you may add them as your dependents. Even if you’re sharing the expenses with your siblings, but you are paying half of it, they can still be added as your dependents. The expenses you incur for the care of your parents can be deducted from your tax.
11. File as Head of the Household if You’re a Single Parent
If you’re a single parent, instead of using “single” as your status when filing for your tax, use “head of the household” instead. You’ll get more deductions through this.
12. Deduction for Military Reserves
If you’re a military reserve or a member of the National Guard, the cost of travel, food and lodging can be deducted if it’s due to meetings or drills. However, certain requirements must be met to be eligible, including traveling over 100 miles from your home and staying there overnight.
Some of these deductions may not be that much. However, they would still bring extra money in your pocket, especially when they add up.
Featured and 1st image by Grant Cochrane / FreeDigitalPhotos.net
2nd image by phasinphoto / FreeDigitalPhotos.net