The 20 Most Overlooked Tax Deductions
What would you say if you knew that each year you were leaving tax deductions on the table that could have put money back in your pocket? You probably would not be happy, but, unfortunately, that is what is happening all across the country, not just here in Coral Springs and Parkland. Throughout South Florida, residents and business owners alike are scrambling to find tax deductions that will save them money. That is why we now present you with the 20 most overlooked tax deductions. Even finding just one that you can use might save you quite a bit at tax time.
1. Tuition and Fees
You can deduct up to $4,000 for higher education tuition, fees, and expenses for yourself or a dependent. You can also deduct student loan interest up to $2,500.
2. State Sales Tax
Since Florida does not have a state income tax, you can deduct sales tax – this is especially beneficial if you have purchased a car, airplane, boat, or other big ticket item in 2016. Discuss this tax deduction with your certified public accountant before filing your taxes this year.
3. Charitable Contributions
Did you know that you can deduct the mileage you used to deliver those clothes to a local charity drive, or the ingredients you used for the bake sale? You will need to keep receipts and mileage records.
4. Job Search Expenses
Did you look for a new job this year? If so, you may have had expenses, such as resume writing or printing services, postage, transportation, parking, or even employment agency services that you can deduct from your taxes.
5. Moving Expenses
If you had to relocate for a new job, you may be able to claim your expenses for mileage to your new home, moving your belongings, and lodging along the way. You cannot, however, deduct the cost of meals.
6. Mortgage Insurance Premiums
Mortgage insurance premiums are tax deductible in 2016.
7. Mortgage Interest
Interest paid on home loans of less than $1 million is deductible unless you are married and filing separately. If that is the case, you can only deduct interest on loans up to $500,000. See the New Marriage Tax Penalty report to learn more about this.
8. Refinancing Points
Unlike a new home purchase where you get to deduct all your points in one year, when refinancing your new loan you deduct them over the life of the loan. If you sell your home, you get to deduct the remainder of the points all at once.
9. Military Reservists Travel Expenses
National Guard and other military reservists can write off travel costs to meetings or drills if they have to travel more than 100 miles and will be away from home over night. Qualified expenses include mileage (54 cents per mile), tolls, parking, lodging, and half the cost of your meals. (Note that the mileage rate goes down to 53.5 cents per mile in 2017.)
10. Medical and Dental Expenses
If you are under 65 your expenses must exceed 10% of your adjusted gross income, but if you are over 65, then the amount drops to 7.5% of your AGI.
11. Medicare Premiums
If you own your own business and qualify for Medicare, you can deduct the premiums you pay for both Medicare Part B and D, as well as any Medicare Advantage plan or supplemental medigap policies.
12. Social Security Taxes
Self-employed individuals can write off half of the 15.3% tax you have to pay.
13. Jury Pay
If your employer pays you for your days on Jury Duty and you have to turn over your jury pay, make sure you deduct that on your taxes.
14. Child Care Credit
You can claim up to $6,000 for the care of two or more children, but if your employer offers a child care reimbursement account you cannot use both for the first $5,000 in expenses. Speak with your tax advisor to find out the best option.
15. Legal Fees for Securing Alimony
General legal fees and courts costs for divorce are not tax deductible, but the portion of the legal fees attributed to setting alimony and tax advice is deductible. You will have to be able to itemize on your taxes, and must get a detailed breakdown of time and fees from the attorney.
16. Baggage Fees
If you accrue baggage fees when traveling on business, make sure to deduct those, as well. Many other travel associated work expenses are also deductible, including research, meals (at 50%), travel, mileage, lodging, and supplies.
17. Tax Preparation Fees
You can deduct any fees to prepare your taxes so long as they total more than 2% of your adjusted gross income.
18. Hobby Expenses
You may be able to deduct some of the expenses of a hobby. Discuss this with your certified public accountant to see what records you will need to keep.
19. Energy Saving Home Improvements
2016 is the last time you can claim a tax credit for energy saving home improvements and installing energy-efficient windows. The credits are somewhat complicated as some only allow up to $500 in total tax credits while there is no limit for alternative energy equipment, so speak with your CPA about these options.
20.Home Office Expenses
You can deduce certain expenses if you use part of your home as your primary place of business.
The goal here at Randee Abramson CPA is to save you money and lessen your tax burden. Proper planning in advance can help. Whether you live or work in Coral Springs, Parkland, Tamarac, Sunrise, Coconut Creek, or surrounding areas, Randee Abramson is your choice for a credible, professional, and accessible CPA.