Don’t miss out on these important tax deductions!

Every year during tax season people gather up all of their tax documents, stuff them in envelopes or bags and head to their accountant’s office. Every year I open the envelopes and bags, sort through the pieces and then make a list of items that are needed to prepare the tax returns. Many people do not know of all the things they can take as deductions, and there are many deductions that are missed each year by individuals because they simply do not know and have not kept track.

Filing tax deductions during tax season. Some of the things that are missed are important to those who can itemize, for example: Did you know you can deduct mileage for charity work? The mileage rate will be different than the standard mileage rate, however, it does qualify as a valid tax deduction…. if you have kept track of it. You can also deduct any other out of pocket expenses you paid in relation to charity work. For example, I used to do face painting to raise money for charities. The face painting supplies were only used for the charities and I purchased them myself, so all of my face painting supplies were a legitimate charitable deduction.

For those who donate appreciated property to a charity, the appreciation on that property qualifies as a charitable deduction, along with any appraisals done to determine that appreciation.

You can also deduct mileage for medical trips, such as to and from doctor’s appointments. Most people don’t have enough medical to qualify for the deduction, however for those who do, this extra bit can really add up. And don’t forget glasses, contact lenses and hearing aids. Other commonly missed medical expenses include treatment centers, birth control (with a prescription), and items purchased for the disabled such as ramps and railings.

For those working or looking for work deductions include such things as expenses associated with looking for work in your current occupation, such as resume services, placement fees and mileage for interviews. If you travel for work and need to pay for laundry and cleaning services while traveling, those are deductible. If used for work, your cell phone and depreciation on your home computer can be used as a deduction. You can also deduct subscriptions to professional journals and other business supplies that you purchase on your own. If you have to pay for education to maintain your position or improve your skills in your current occupation, those too are allowable deductions.

While most clothing for business is not deductible, any protective clothing purchased for your job will be deductible.

And, if you get that new job – moving expenses are also allowed as deductions under certain conditions.

When it comes to investments people often miss the investment expenses charged by the brokerage houses. These are considered investment expense deductions. Investment advisory fees, early withdrawal penalties and margin interest are also allowable deductions. Don’t forget the safe deposit box fees for the safe deposit box you are holding the stock certificates in.

For those lucky enough to win big at the casino or in the lottery, gambling losses (up to the amount you won), are also deductible.

If you own a home or are buying a home, don’t forget the points or the property tax that gets paid when the purchase or sale happens. Mortgage prepayment penalties and late fees are also deductible. You can also deduct commissions and fees paid on a closing.

While many legal fees are not deductible, some are. If you pay legal fees for a tax audit, those are deductible. If you pay legal fees related to receiving or collecting alimony, those are deductible. And if you pay legal fees related to any investments, those too are deductible.

Theft and casualty losses are also allowed. I remember once when a client provided me with an envelope that said “theft and casualty loss”, but nothing was in it. He said he just wanted to let me know he didn’t have any theft or casualty losses!

And finally, the most important deduction, the fees you have to pay to the accountant to make sure you don’t miss any of the deductions you are entitled to.

There are many more deductions that folks are entitled to, but these are a few of the most common. Until such time as the tax code gets simplified, it might be a good idea to check with a tax professional to make sure you are not missing any of the deductions that you should be taking.

 

Alisa Hunt is the Academic Program Manager for the Master of Science in Accounting Program at Post University. Hunt earned a B.S. in Business Administration with an emphasis in Finance from National University an M.S. in Education from Capella University and a Ph.D. in Education from Cappella University. Hunt has been in the business world for 20-plus years, as a business owner, and in leadership positions in various organizations.  Currently, she owns a consulting and training company where she trains and consults with business on issues from Accounting and Finance to Diversity and Creativity.  

2 Comments

  1. Çatı Penceresi

    There are many more deductions that folks are entitled to, but these are a few of the most common. Until such time as the tax code gets simplified, it might be a good idea to check with a tax professional to make sure you are not missing any of the deductions that you should be taking.

  2. Always interesting topics about tax deductions.
    How does a tax reduction for the prosperity of a person?
    Thank

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