5 Commonly Missed Tax Deductions and Credits
No one wants to overpay their taxes. Your goal is to pay less or get a bigger refund. Deductions and credits are excellent ways to increase your refund and keep more money in your pocket. If you are diligent, pay attention, claim what you deserve and take the time to itemize deductions, these can really add up!
We have compiled a list of the five most commonly missed tax deductions and credits. Use it to make sure you’re not leaving money on the table!
1. Charitable deductions (out of pocket)
You are probably good at deducting monetary contributions to your favorite charity, but did you know you can also deduct expenses that you incur for other non-monetary contributions? For example, you can deduct the cost of ingredients for the brownies you bake to donate for the bake sale…and your mileage when you drive your vehicle for a charitable organization…or even the cost of stamps from the fundraiser mailer you were in charge of.
2. Child Care Tax Credit
The child care credit gives you more money in your pocket than your average deduction. Due to a change in how much you can use from a reimbursement account ($5,000) and how much you can qualify for the credit ($6,000), you could have $1,000 of direct out of pocket expenses – if you deduct these, you will likely pocket around $200!
3. Mortgage points from a recent refinance
When you refinance your home, you deduct points over the length of the loan. So, if your loan is for 30 years, you can deduct 1/30 each year for the life of the loan. This might not sound like much, but it adds up over the course of the loan.
4. Student loans…paid by your parents?!?
If your parents do not claim you as a dependent and they have paid your student loans, YOU can get the deductions – up to $2,500.
5. State Sales Taxes
If you live in a state that does not collect state income taxes, you have to decide whether it is better for you to deduct state and local income taxes or state and local sales taxes. How do you decide? You can consult the IRS website for guidelines on how much you can deduct. If you made a big purchase over the year (boat, vehicle, airplane or building materials), then you can add the state sales tax to your deduction for the year, as long as the rate paid is not higher than the general sales tax rate for the state.
Success Tax Relief can help you maximize your deductions and credits
Do not miss out on these and many other deductions. If you are concerned about not being able to make all the possible deductions on your own, consider hiring a tax firm to help guide you. Success Tax Relief has helped thousands of clients file complete and accurate tax returns, while maximizing all possible deductions and credits. Our expert tax professionals are standing by now, ready to start helping you with your return so that you do not have to worry about it any longer. Contact us today!