Now that all the 2011 tax deadlines have passed, it is a perfect time to start planning for the next tax season.
Here is a list of 10 deductions individual taxpayers may overlook provided by Bankrate.com:
- Additional charitable gifts – everyone knows the donation itself is a deduction, but did you know certain expenses are deductible as well? For example, you could be reimbursed charitable miles at $0.14 per mile, the cost of any supplies bought for the group, and if a uniform is required, you could deduct the cost of that uniform and its cleaning bills.
- Moving expenses – there are many moving expenses you can deduct when you relocate. For example, even your first relocation after college to start a new job is deductible.
- Job hunting costs – costs related to searching for a new job in your current profession can be deductible if you itemize. These expenses can be related to your resume, phone calls, and even employment placement agency fees. For this to be beneficial, the total miscellaneous itemized expenses must surpass 2 percent of your adjusted gross income.
- Military reservists’ travel credits – military reservists and National Guard members whose travel exceeds 100 miles and stay overnight for training may deduct related expenses including 50 percent of meals, cost of lodging, toll and parking fees, and 55.5 cents per mile if you drive your vehicle.
- Child, and more, care credits – costs associated with child care while the parents are at work are deductible during all times of the year. This includes summer camps, but only if it is a day-camp; overnight camps are not included. Also, if you have an adult dependent in need of care while you are at work, you can claim those expenses as well.
- Mortgage refinancing points – if you refinance your home loan and use the proceeds to improve your principle residence, those points could be deductible.
- Many medical costs – to be able to benefit from your medical and dental expenses when you are itemizing, the costs need to exceed 7.5 percent of your adjusted gross income. This may be difficult for some taxpayers, but including travel expenses to and from medical treatments, the cost of alcohol and drug abuse centers, and insurance premiums paid from already-taxed income could potentially help a tax payer exceed the threshold. Self-employed taxpayers that are not covered by an employer-paid plan can deduct 100 percent of their insurance premiums in the adjusted gross income section of the Form 1040.
- Retirement tax savings – created as an incentive for moderate- and low-income taxpayers to save, the Retirement Savings Contribution Credit allows taxpayers to receive up to 50 percent of their first $2,000 put into a retirement account. That is a $1,000 credit that can reduce the amount of tax you owe.
- Educational expenses – there are quite a few deductions related to education. For example, tuition and fees could be deducted and allow you to take up to $4,000 off your taxable income. The Lifetime Learning Credit could supply a taxpayer with up to a $2,000 credit. Also, the American Opportunity credit presents the opportunity for a dollar-to-dollar tax break up to $2,500.
- Energy-efficient home improvements – although a lot of energy tax credits have been reduced or removed, the Residential Energy Efficient Property Credit runs through 2013. This credit is 30 percent of the costs of qualified residential alternative energy equipment. Such equipment includes solar for hot water heaters and electricity, wind turbines, and fuel cell property installed on the main residence and located within the United States.
http://www.irs.gov/uac/Get-Credit-for-Making-Your-Home-Energy-Efficient-or-Buying-Energy-Efficient-Products For #10 since the main article’s #10 is outdated.
Compiled by Joelle Smith, LinkedIn Profile