Most Overlooked Deductions
Are you getting all the deductions you deserve?
Find out what you may be missing.
Deductions allow you to reduce your taxable
income and thus reduce your tax bill. Most taxpayers are
entitled to the standard deduction - a fixed amount that reduces
the amount of income on which you are taxed. However, certain
kinds of deductions are called itemized deductions. If you have
enough of them to beat the standard deduction, it is usually a
good idea to itemize instead. For many taxpayers, purchasing a
home is the event that makes itemizing worthwhile.
There are also so-called "above-the-line"
deductions, which are different than itemized deductions. If
you qualify, you can claim these deductions even if you
don't itemize. Finally, if you own your own business, some
additional deductions apply to you. Some of them are
"above-the-line" deductions and some are claimed directly on
your business schedule, called a Schedule C. (Note: Farmers
and owners of rental property use different schedules.)
The Standard Deduction
- Single or married filing separately, $5,150
- Married filing jointly or qualifying widow(er), $10,300
- Head of household, $7,550
View the
Standard Deductions rate table.
Itemized Deductions
Your mortgage interest and real estate taxes
may be your biggest deductions, but don't forget:
-
Medical expenses - in addition to what you've spent
on doctors, hospitals, and medicines, other
possibilities are health insurance premiums,
prescription eyeglasses and contacts, hearing aids,
medical transportation, equipment for disabled people,
and nursing home expenses
-
State and local
income taxes and personal property taxes
- Charitable
contributions cash and property donated to
charitable organizations, including household items
donated to Goodwill and similar charities
- Out of Pocket Job Expenses
that were not reimbursed by your
employer, including car expenses (the non-commuting
kind), travel expenses, uniforms, union dues, and
continuing education expenses
- Safe-deposit box fees, tax preparation fees, certain legal fees, and other miscellaneous expenses
View the
Itemized Deductions
rate table.
"Above the Line" Deductions
Remember, the good news is that you may claim
these deductions whether you itemize or take the standard
deduction.
- Student loan interest - up to $2,500
- Tuition and fees deduction - up to $4,000 of qualified higher education expenses
- Moving expenses - the cost of moving your family and belongings to a new job location
- Alimony paid
- Military reservists deduction - a deduction for non-reimbursable travel expenses for reservists who service more than 100 miles from home and stay overnight
And if you are self-employed...
- One-half of your self-employment (social security and Medicare) tax
- 100% of self-employed health insurance premiums for yourself and family
- Contributions to self-employed retirement plans, such as SEPs, SIMPLEs, and defined-contribution plans
See how much self-employment tax you'll owe
this year with our .
Schedule C Deductions
If you own your own business, don't forget:
- Advertising and promotional costs
- Business liability insurance
- Legal and professional services
- Car and truck expenses
- Wages, employment taxes, employee benefit plans, and contributions to employee retirement plans
- Home office expenses
Of course, there are many rules and
limitations about claiming deductions. Schedule an
appointment or call Tami @ 317.345.4182
