You may hear a lot about individual tax deductions and credits this tax season, but chances are you are leaving money on the table every year. The good news is there are multiple tax deductions that you can find by looking at your family expenses, home expenses and the money that you spend every year for your job, too.
9 Commonly Overlooked Individual Tax Deductions
According to H&R Block, nearly 4.1 million tax payers leave money on the table when they prepare their tax return at the end of the year – and that’s just unclaimed education tax benefits. In many cases, it only takes a few simple changes to your return to claim money that is owed to you. To help you maximize your next tax return, ask yourself the following questions before you file:
1. Did your parents pay the interest for your student loan? Provided that you are no longer their dependent, you may be able to deduct up to $2500 of the money that your parents paid on your student loan.
2. Are you self employed? If you work at home, you may be able to deduct the cost of running your home office. For example, the utilities that you use for your office and necessary supplies, like your office computer, are all examples of home office deductions.
However, it’s important to remember to only deduct costs incurred by your office and no more; being too deduction-happy can trigger an audit. In addition to work expenses, you may also be able to deduct your work-related travel expenses and any health insurance expenses that you have.
3. Did you have to look for a new job? If you had to search for a job, then you can potentially deduct the expenses that you incurred while seeking employment, like gas for travel.
4. Were you required to relocate for your job? Relocation costs as a result of a new job contribute to another deduction that many people overlook.
5. Did you contribute to any charities? If you donated to a charitable cause using cash or check, then you can use that as a deduction. It’s very important to keep records of any donations you have made.
6. Are you responsible for child care or care of any dependents? Although this is a tax credit and not a deduction, it’s also frequently overlooked by many people who are solely responsible for the care of a minor or other dependent.
7. Did you incur any medical or dental expenses? Medical expenses related to a legitimate medical need and the cost of dental care can all be deducted at the end of the year if they exceed the threshold.
8. Do you or any of your children require special accommodations because of a medical condition? Similar to deductions related to medical expenses, if you or your dependent(s) required any special accommodations as a result of a medical condition, then you may be eligible for a deduction. An example of this would be the cost of tuition for a special education class for an autistic child.
9. Did you take the time to itemize your deductions? This is one of the first things that should be done to ensure you are receiving the maximum amount of money back from your tax return; unfortunately, it also happens to be the most frequently overlooked way to get the most out of tax deductions because it involves extra work.
Final Words on Finding the Most Overlooked Tax Deductions
In most cases, it’s recommended to have a certified tax professional look over your return before filing, especially if you are planning on using any of the above deductions. Although some are straight forward, like cash contributions to charities, other deductions can be very tricky to figure out – like self employed office expenses. However, don’t let that put you off from finding out if you qualify to use any of the most overlooked tax deductions.