Taxpayers, especially those who wait until the last minute to file, will often miss a handful of tax deductions that could have put more of their hard-earned money back in their pocket. These deductions are in most cases ones that would have been found on their Schedule A.
Experienced tax professionals are experts in tracking down and identifying virtually any tax deduction you qualify for. These deductions are important because they directly reduce the amount of your income that is taxable, leaving your final tax bill much lower.
Here are some common deductions that are often overlooked:
- Charity – It is common knowledge that you can deduct your charitable contributions, but if you volunteer you can also deduct $0.14 per mile for transportation costs to and from the location where you are volunteering as well as the cost of supplies you use in that charitable work.
- State Sales Taxes – You have to choose between deducting state sales tax or state income tax, so for most individuals choosing state income tax will likely be the best bet. But if you live in a state where there is no state income tax, don’t overlook this deduction.
- Dependent Care Credit – Most parents are familiar with this credit, but many are not aware that you can also claim a lot of costs associated with summer day camps for your children and even some adult dependent care costs as well. There are some restrictions, but it’s something most families should look into.
- Contributing to a Retirement Plan – Many know the tax benefits of contributing to a retirement plan, but what they may not know is that for certain low to moderate-income taxpayers, a tax credit (as opposed to just a deduction) is available, known as the Retirement Savings Contribution Credit.
- Job Search Fees – If you are looking for a job in your present occupation, you can deduct all sorts of costs, such as resume preparation and employment agency fees.
Bottom line, every dollar you can find to deduct can save you anywhere from $0.10 to $0.40 cents. Make sure you enlist the help of a tax professional to do the detective work for you if you want the maximum deductions for which you are eligible.