It is tax season. You may already have plans with your tax returns from debt elimination to setting aside money for a larger purchase. Either way, we know that tax returns are a big part of your personal finances. Therefore, we want to give you a quick reminder about tax deductions you may miss. As a result, you are able to claim your dues in full.
Tax Deductions You May Miss
Sales Taxes: If 2016 was a big year for you the sales tax break might be something you want to consider. You have to itemize to take the deductions. The IRS provides tables to use as a guide. You get to add the state sales tax you paid to the amount shown in IRS tables for your state. However, the sales tax rate you pay should not exceed the state’s general sales tax rate. The same goes for homebuilding materials you purchased. These items are easy to overlook. The IRS has a calculator to help you figure out the deduction, which varies by your state and income level.
Health Insurance Premiums: If your medical expenses exceeded 7.5 percent of your adjusted gross income, you may have the possibility of getting them deducted. However, if you’re self-employed and responsible for your own health insurance coverage, you can deduct 100 percent of your premium cost. That gets taken off your adjusted gross income rather than as an itemized deduction.
Paying the Babysitter: If you were volunteering to a recognized charity, and you incurred a cost on babysitters to perform your duties, then you might be able to deduct the cost of a babysitter.
Lifetime Learning: The Lifetime Learning credit can provide up to $2,000 per year. This intends to take off 20% of the first $10,000 you spend for education after high school. These education efforts of yours intend to give you new or improved job skills. This phases out at higher income levels but doesn’t discriminate based on age.
Looking for Work: Becoming jobless can happen to anyone. Some of the costs of job searching are eligible for tax deductions beyond the threshold. The determining factors for these deductions are:
- If you lost your job last year
- Incurred more than 2 percent of your gross income to seek a job in the same field
Furthermore, you can consider deducting the mileage you put on your car driving to interviews and the cost of printing résumés.
Working at Home: If you are self-employed and work at home, some costs are eligible for tax deductions. These include a portion of your utilities, the rent for your home office, and even subscriptions to work-related publications and memberships.