Lesser Known Tax Write Offs That Will Increase Your Tax Return
February 9, 2016 / Sara Davis / Use My Tax Refund Wisely
With tax season here, many Americans are busy getting their W-2s, 1040s, and other tax documents in order.
While filing your taxes isn't the easiest or most enjoyable thing to do, it is important. Skipping a year can mean fines or other ramifications, and every year you wave off this responsibility, it only gets worse.
However, there is a benefit to getting your taxes done: tax deductions.
There are many ways you can reduce the amount you pay in taxes you might qualify for. Oftentimes, people don't realize the many ways they can save money and get a bigger refund. Before you take your W-2s to the tax man or begin firing up your tax-filing software, be sure to do your homework and find out what deductions you qualify for.
Home Sweet Home
There are many housing-related tax deductions available to homeowners and renters alike. If you have mortgage insurance, you can deduct the insurance premiums you've paid toward it as long as the policy was created since 2007, GOBankingRates reported. You can also count the interest you've paid on your mortgage if you itemize your deductions.
If you did some home improvement work last year, you might be able to deduct that as well.
You are able to claim a credit for 10% of what you spent on an energy-saving improvement, or 30% if that improvement utilized alternative energy, like solar panels, according to All You.
If you refinanced your mortgage, you might be able to deduct that as well if you deduct over the course of the entire loan, rather than all at once.
The IRS recognizes how hard it is to move.
If you moved for your job, you can deduct moving expenses your employer didn't pay for, as long as the commute from your old home to your new job would be more than 50 miles longer than you had been traveling for work.
Also, according to The Fiscal Times, you can also claim a deduction for expenses that went to moving your pet.
There are plenty of work-related expenses that can be claimed.
For instance, you can deduct union dues. You can also claim the purchase and care of any uniforms or necessary work clothes that wouldn't be considered everyday clothing, explained The Fiscal Times. This can include uniforms for firefighters, delivery workers, musicians, actors, and professional athletes.
If you're on the hunt for a new job in your current field, you can deduct expenses like printing and mailing resumes and costs associated with getting to and from job interviews. This includes parking and gas mileage.
Teachers do a lot for their students and classrooms.
For this reason, teachers can deduct any classroom expenses they covered themselves up to $250, according to TurboTax. Even if you don't itemize it, you can claim it because it gets subtracted from your income.
Using your car or home for work can be a hassle, but it pays off come tax time. You can deduct some expenses for working at home if it's the primary location for the business or for meetings, or used for storage. You can also deduct home expenses if it's used for child care or being rented out.
If you use your car for work, you can deduct 54 cents per mile.
If you run a business and make some odd purchases for its benefit, these can be tax-deductible. For instance, a junkyard owner who needs to keep mice and other rodents away from his lot might feed stray cats to keep them around. That cat food is tax deductible (believe it or not).
The self-employed have a few deductions available to them, too. Paying for social security when you're self-employed is expensive, but you can claim the "employer" portion of your fees on your taxes. You can also deduct your health insurance premiums. You can claim contributions to retirement accounts like a 401(k) as well.
Medical expenses can pile up in a year. You can deduct medical expenses if they amount to more than 10% of your annual income if you itemize your deductibles.
This can include contact lenses, acupuncture, clarinet lessons to help align a child's teeth, drug addiction treatment, exercise or weight loss programs prescribed or recommended by a doctor, and artificial limbs or teeth, among many more, TurboTax explained. If you or your spouse are 65 years old or older, you can deduct medical expenses that total 7.5%of your annual income.
Doing Your Taxes Gets You Tax Deductions?
Getting your taxes prepared and filed is tedious, time-consuming and confusing. But, fortunately, the IRS knows this. According to GOBankingRates, you can deduct expenses related to filing your taxes, such as tax return preparation and fees for electronic tax filing.
Want to learn more about getting the most out of your taxes this year? Subscribe to our email list!