While it is far from tax season, it won’t be long until you’re scheduling an appointment with a tax professional to get your taxes done or setting aside the time to do them yourself. Although filing taxes can be a burden, what can be even more troubling is finding out you forgot to include a deduction that would have increased your tax refund. In a hurry to get your tax return completed before the deadline, it’s understandable how it can be easy to miss avenues that could add more to your refund. That being said, tax expert David Stewart outlines some of the deductions that are commonly overlooked.
Getting involved in any type of charity work is a great thing and the government recognizes the good deed. From big charitable gifts such as adopting a family in need to the smaller contributions such as preparing food to give at a local shelter, and even driving your car for charity purposes, these expenses certainly add up and are coming straight from your own pocket. Out-of-pocket expenses for charitable work qualify for deductions. You should save the receipts or itemize the costs.
First Job Moving Expense
Did you or will you have to move due to accepting a new job or because the company you work changed locations? If you relocate due to a change in your job or company location, or because you started a new job, you may be able to deduct your moving expenses. Special rules apply to qualify, however. Your new workplace has to be at least 50 miles from your old home. You must be a full-time employee and work for a minimum of 39 weeks for the first year immediately following your move to the new area.
State Sales Taxes
This applies to those who reside in a state that does not collect incomes taxes. You can choose to either deduct state and local taxes, or state and local sales taxes. For residents of income tax state, the income tax deduction is usually the better deal. If you purchased a vehicle, boat, airplane, or home building materials, you can add the state sales tax you paid to receive a deduction.
Student Loan Interest Paid, Courtesy of Mom and Dad
There’s a new exception to parents paying back a student loan incurred by their child. If you pay the loan, the IRS treats it as though they gave it to their child who then paid the debt. Therefore, students who are not claimed as a dependent can qualify for a deductible.