Tax Deductions are your money, don’t miss out on it

We’re coming to the end of tax time once again… and for those of us who do our own taxes that means zeroing in on every tax deduction possible.  At this point in my life I don’t have many out of the ordinary deductions, which makes filing easier from year to year.

The tax deductions I frequently claim include:

• Donations to charity
• Mortgage interest
• Property taxes
• Student loan interest

In fact, these four main deductions account for 97% of all our deductions combined!  That said, regardless of the amounts every deduction is important, worth finding, and worth using.

In the spirit of hunting for every possible deduction I wanted to bring to your attention an awesome article resource I found while poking around on the TurboTax website entitled ‘The 10 Most Overlooked Tax Deductions.’

Top 10 overlooked and commonly missed income tax deductions

Use this brief list to get ideas and follow the links to read about each one in greater detail.

1. State sales taxes – useful for those living in states with no income tax. {read more}
2. Reinvested dividends – easy to miss if you automatically reinvest your mutual fund dividends.
3. Out-of-pocket charitable contributions – be sure to include mileage and other lesser considered contributions to charitable organizations.
4. Student loan interest paid by Mom and Dad – the IRS now treats this as a gift to children.
5. Moving expense to take first job – fresh out of college?  move more than 50 miles away?  this deduction is for you.
6. Child care credit – useful if your child care costs exceeded your tax-favored reimbursement account at work.
7. Earned Income Tax Credit – a substantial credit for low-to-moderate income workers that is very frequently missed.
8. State tax you paid last spring – you are eligible if you owed state income taxes after filing last years return.
9. Refinancing points – points from refinancing can be deducted equally each year for the entire life of the mortgage.
10. Jury pay paid to employer – make sure you do not pay taxes on jury fees you must turn over to your employer.

Some of these are deductions while some are actually credits.  Some can be quite substantial while others tend to be small.  Regardless of the size or type… if you can reduce the amount of tax you owe then you would be a fool not to do so.  Hopefully this article will help a few DFA readers keep more of their hard earned money where it belongs… in their own pockets!

Don’t miss these deductions

Before reading these tips I had forgotten about a donation of cash and mileage to the Salvation Army – topic #3 above helped remind me to claim it!