Perhaps you are one of the many folks who have already filed your taxes for 2017. If so, excellent job! Alas, many of us procrastinate and put things off. If you have not yet filed this year, double or even triple check to make sure that you have counted all your deductions. Many taxpayers either forget about certain tax deductions or are simply unaware of them. Here are a few of them.
Donations to charity: you will very likely remember the large contributions that you made last year. Don’t forget the smaller ones, because they count, too. Always hang on to receipts. If you used your car for charity work, you may deduct 14 cents per mile. Remember expenses related to searching for employment. Hopefully, you were successful in attaining a respectable job. Some expenses that you accumulated while searching for a new job can be deducted, but only if the total expenses were more than 2% of your adjusted gross income. So which things would be applicable? Transportation costs, food and lodging, cab fares, printing of resumes and other job-related documents, and employment agency fees. Next, we have state sales taxes. If you don’t reside in a state which has income taxes, this write-off is important. Folks who itemize can deduct state income or sales taxes which have been paid. For the bulk of taxpayers that live in states that charge income taxes, the income tax deduction is usually the better choice. The IRS has resources which show how much residents of different states can deduct. If you bought a plane, boat, or automobile, you may add the sales taxes paid to the figure shown in the IRS tables for your home state. There are also child and dependent care tax credits. Until quite recently, the child care credit applied to qualifying expenses up to $4800. Now, the limit is $5000. This would apply to any work-related tax-favored reimbursement account. If you reach the $5000 maximum through a plan at your place of employment but you still spend more on work related child care, you will be eligible to claim the credit up to an extra $1000. In addition, there are earned income tax credits. With tax credits, your total tax bill is reduced dollar for dollar. This contrasts with a deduction. Missing any number of credits can be disastrous. A vast number of lower income taxpayers miss out on the earned income credit each year. The IRS says that some people don’t take advantage of this tax credit due to it being difficult and complex. This credit exists to supplement wages for low to moderate income workers. However, it doesn’t just help lower income people. The exact income which you qualify for will depend on your income itself, the size of your family, and your marital status. You’re also eligible to claim an EITC refund for up to three previous years if you haven’t already done so. Tax deductions needn’t be a headache for you. Contact Rozier today for any questions which you might have regarding tax deductions!