List of Tax Deductions You Won’t Want to Miss!
Tax Season…most of us have a love/hate relationship with this time of year. And while it’s tempting to ignore it until the new year, your taxes and time may benefit from keeping it top-of-mind all year long. Receipts, expenses, purchases, and assets are all prime records that you should be keeping year-round to get ready for the big day. Besides, we think you’ll agree that it’s never too early to plan for deductions.
Deductions take a vast chunk of your time when filling out your tax return, and – we all hope – save you a vast amount of money. Charitable donations, medical expenses, home equity lines of credit, work-related expenses – all of these top the list of tax deductions that are commonly used. But there are many unfamiliar deductions that you may be missing. Here are just a few.
Don’t Miss This Uncommon List of Tax Deductions
- Student Loan Interest
You’re diligently chipping away at your student loans? Great job! You get a deduction. A portion of the interest you pay on the student loans is tax-deductible. The benefit caps out at $2,500, and you will not receive the deduction if you make more than $75,000 per year as an individual or $155,000 per year if married. But if you meet those requirements, you’ll benefit from a great deal of tax savings.
- Child Care Costs
Do you feel like your disposable income is eaten up by childcare costs? Paying for childcare is a hefty expense for many families. Thankfully, you’re able to recover some of that money through the Child and Dependent Care Credit. Tax credits can be worth between 20 and 35 percent of your total childcare costs. Having someone that you trust to watch your littles is priceless, and we know you’d gladly pay any amount for their safety. But a little kickback certainly doesn’t hurt.
- Mortgage Points
Refinancing your mortgage? Pay attention here. You’re probably well aware that the interest you pay on your home loan is tax-deductible. But did you know that if you buy “points” to lower your interest rate, that money is tax-deductible as well? The IRS allows you to deduct the full amount of the points over the life of the loan. For instance, if you bought down your interest rate, paying $3,000 in points on a 15-year mortgage, you can deduct $200 per year.
- Jury Duty Fees
Did you recently serve Jury Duty and have pass-through income from the jury fee? That may be tax-deductible. Many employers still pay your full-time salary for the time you spend in Jury Duty. However, since you also receive payment from the government for the time you served on the jury, some employers require that money be given back to them. Yet, at the same time, the IRS requires that you pay taxes on the jury money earned. If you simply “passed-through” the jury fee to your employer, you can deduct that income from your total taxable income.
- State Income or Sales Tax
Did you know you can deduct taxes that you have already paid? While you are only permitted to deduct one or the other, you can choose which one according to what will provide the most benefit for you. For most people, deducting the tax that was paid on state income proves most profitable; however, if you made a large purchase that incurred considerable sales tax, such as a boat or new vehicle, it may be the year to choose the sales tax deduction.
This is just a small list of tax deductions that you may be missing without someone to help you navigate the complex and always-changing tax laws!
Here at Perry & Associates, we would love to help you determine what deductions you can take and how best to track that right now. Our tax professionals are ready to take on even the most uncommon tax deductions. Call us today and get a head-start on tax season!