Deductions You Probably Missed

Experienced tax pros are experts at knowing which deductions to look for when you file your taxes. Deductions are simply defined as subtractions from your income that can save anywhere from hundreds to thousands on your taxes.

Due to the new tax laws, everyone is going to get a much bigger standard deduction this year: $12,000 if you are filing single, and $24,000 for those filing jointly. Early estimates say that 90% of Americans won’t need to itemize due to the higher standard deduction.

But if you are one of the few who are still better off itemizing, here are some of the deductions often overlooked:

  1. Charity – Most people know they can deduct their contributions, but if you volunteer your time, you are able to deduct $0.14/mi for transportation to and from that charity, as well as the cost of any materials you purchase for use with that charity.
  2. State Sales Tax – The total of sales, income, and property taxes is now capped at $10,000, but there is still the potential of a deduction. This one is best for those who live in a state without state income tax.
  3. Dependent Care Credit – This is not the same as the child tax credit. This one can also be applied to adult dependent care. Restrictions do apply in some circumstances, but it’s worth checking out.
  4. Retirement Savings Contributions Credit – If you are in certain low to moderate income brackets you may be able to claim an additional credit for putting money away for retirement. Check to see if you qualify.

Bottom line, if you have more deductions than the standard deduction that the IRS offers you, you will ultimately be better off itemizing. So check with your tax professional to make sure you are filing in a manner that maximizes your tax savings.

About cozbycpa

Heather L. Cozby is a CPA on the South Shore and Cape Cod. The managing partner of Cozby & Company, LLC, Heather has the resources and experience necessary to provide quality professional services on a timely basis and at a reasonable cost. She specializes in tax planning & preparation; audit, review & compilation services; management advisory services; bookkeeping; and accounting. Her unique niche is in working with homeowners’ associations and condominium trusts, advising with rental real estate, and providing outsourced financial consulting for mid-sized companies. She is more entrepreneurial than most accountants, and offers the best of both worlds - providing the services of a larger firm while retaining the ability to connect with her clients on a personal level.
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