Missing out on tax breaks that are available to you is like throwing free money out the window. Before you send in your tax bill, make sure to go through the below list, and do your due diligence by speaking to a tax preparer or being very thorough on what’s available to you and how to take advantage of it. There are a few different deductions that a lot of taxpayers forget are available to them, deductions that could add up to a hefty sum. While there are likely plenty more deductions you can take, the below are some of the commonly forgotten ones.
1. Health insurance premiums may be one of the areas that are deductible. While you have to add all of the premiums to your overall medical expenses, the cumulative sum, if exceeding 7.5% of your Adjusted Gross Income, may allow you some tax benefits. If you’re self-employed, 100% may likely be deductible. If you are self-employed, you’re probably going to want to check the health insurance premiums out.
2. Clean fuel credits can range from $400-$2,400 with an added $250-$1,000 if the fuel your pumping is into a new hybrid, depending on the make of the car and the fuel economy. There are some stipulations to taking these credits, so dig a little deeper if you are planning on buying a new car or are already green because you care about the environment!
3. Educator expenses are a big one for a lot of teachers around the country, but few seem to take this deduction. If you are a qualified educator, and you’ve been shelling out your own money for supplies like books, computer equipment, you’re probably going to want to take this break–but again, check in to make sure you still can. Congress is expected to renew this break, but it may (unlikely) go away.
4. Noncash contributions such as charity donations are an easy tax deduction to take, but just make sure you have the proof. Credit Card donations are probably the easiest to prove. Often, though, you’ll get a receipt from the charity, because this type of break is a relatively common one. If you’re not in the charity game on a regular basis, you may wonder why you’re offered receipts on donations to organizations like Goodwill–and that’s why. Who knew you could write off that pair of jeans you haven’t worn in 15 years?
5. New and old points on refinancing can be deducted on a monthly basis, at least over the life of the loan. While it may not be as large a deduction as you would like it to be, it’s still better than nothing. Check the actual rules, though, to make sure you’re following the guidelines. For old unamortized points on arefinancing, you can deduct in the year when you make a new refinancing.
6. Investment & Tax expenses, while they are part of ‘miscellaneous expenses,’ may be deducted if they are over 2% of your adjusted gross income. Publications that you read to learn about investing, fees paid, all of these can likely be deducted–but again, do your homework. You may want to browse around the net to find some more detailed information, but a decent blog that could answer some of your questions is Blog Catalog’s Tax Deduction page.
