Tax Deductions you might Forget

Few realizations are more painful than realizing that you forgot to include a tax deduction that would have lowered your tax bill or increased your tax refund on your tax return. Here are some tax deductions that you shouldn't overlook.

 Sales Taxes
You have the option of deducting sales taxes or state taxes off your federal income tax. In a state that doesn’t have its own income tax, this can be a big money saver

 Health Insurance Premiums
Medical expenses can blow any budget, and the IRS is sympathetic to the cost of insurance premiums – at least in some cases. For most taxpayers, medical expenses have to exceed 7.5 percent of your adjusted gross income to be deducted.

 Tax Savings for Teacher
It’s the rare teacher who doesn’t have to reach into her own pocket every now and then to purchase items needed for the classroom. It allows qualified K-12 educators to deduct up to $250 for materials.

 Paying the Babysitter
You might be able to deduct the cost of a babysitter if you’re paying her to watch the kids while you volunteer to work for no pay for a recognized charity.

 Lifetime Learning
The Lifetime Learning credit can provide up to $2,000 per year, taking off 20 percent of the first $10,000 you spend for education after high school in an effort to give you new or improved job skills.

 Unusual Business Expenses
If something is used to benefit your business and you can document the reasons for it, you generally can deduct it off your business income.

 Looking for Work
Losing your job is traumatic, and the cost of finding a new one can be high. But if you’re looking for a job in the same field, you itemize your deductions and these expenses exceed 2 percent of your gross income, any expenses over that threshold can be deducted.

 Self-employed Social Security
You have to pay 15.3 percent of your income for social security taxes, the portions ordinarily paid by both employee and employer. But there's one small consolation – you do get to deduct the 7.65 percent employer portion off your income taxes.

Courtesy of TurboTax

For more information contact Neikirk, Mahoney and Smith at 502-896-2999