8 Tax Deductions You Didn't Know About
8 Tax Deductions You Didn't Know About
If you're a seasoned tax filer, you don't ever overlook tax deductions like mortgage interest, student loan interest, real estate property taxes, and state taxes. Still, plenty of little-known tax deductions hide deep in the tax code, tricking you into leaving tax refund money on the table.
Thislist of commonly overlooked personal tax deductions will help beginners and experts alike discover major savings this tax year.
Major Purchases, Family and Home
1. Dependent parents. If you're providing more than 50 percent of your parents' financial support, and their expenses exceed 7.5 percent of your adjusted gross income, you may qualify for a big deduction.
2. Sales tax on a new vehicle. This deduction comes with a lot of restrictions and stipulations -- If you purchased a new car recently, you may be able to deduct the sales tax on the purchase, even if you don't itemize your deductions. Depending on your filing status and income, your deduction might be a little lower. ( is not applicableif you make more than $135,000)
3. Origination Fees and Mortgage loan discount. Ifyouhave purchased a house recently, you got to check yourGood Faith Statement and deduct any mortgage origination fees or discount points that you paid. The IRS considers all of these expenses prepaid mortgage interest, andtheyare always deductible for primary residences.
4. Energy efficiency improvements on your home. Improvements like installing doors, windows, a water heater, furnace, or air conditioner, you may be able to deduct up to $1,500 off your tax bill.
Volunteering
5. Childcare expenses when volunteering. If you paid a babysitter to watch the kids while you volunteered for your church or other non-profit organization, you can deduct that expense on your taxes.
6. Mileage for volunteer work. If you travel a long way to volunteer for a charity, you can deduct the IRS-determined mileage allowance for your commute back and forth.
Work and School
7. Business meals and entertainment. If you're a small-business owner who takes prospective or current clients out often, you're incurring a great deal of expenses for meals and entertainment. Keep these expenses separate, because you can deduct 100% of the cost of entertainment and 50% of what you spend on meals.
8. Continuing education deductions. If you itemize your deductions, don't miss out on these miscellaneous itemized tax deductions: Subscriptions to professional publications, dues paid to professional associations, investment advisory fees, costs of a safety deposit box, and tax-preparation fees.
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