Home > Preparation > Commonly Overlooked Tax Breaks You Should Know About

Commonly Overlooked Tax Breaks You Should Know About

Posted on February 4, 2014 by
More articles from Preparation

saving with tax breaksThe IRS has started processing e-filed 2013 tax returns on January 31st. As you place the finishing touches on your forms, you might want to see if there are any tax breaks available to lower your tax debt or to increase the amount of the refund you can receive. Here are the commonly overlooked tax breaks that people are not aware of but should see if they qualify for to get the benefits.

 

Job Search Costs

Were you employed but looking for a new job anytime during 2013? There’s a tax break for that. If you incurred costs related to your job search (printing out business cards, transportation expenses, employment agency fees, phone calls), you can deduct the expenses so long as you itemize everything. The total for all miscellaneous expenses will have to exceed 2% of your adjusted gross income, according to Kiplinger.

 

Relocation Expenses for Your Job

So you snagged that new job right out of college but it is too far away to commute to if you stay at your present location. While most people know that moving expenses to relocate to a different job is tax deductible, many recent college graduates aren’t aware that relocation expenses for that very first job is also a tax write-off. The job has to be 50 miles or more from your old residence to qualify.

 

Self-Employment Expenses

Self-employed people have numerous tax breaks to look forward to on their returns. Do you have a home office? You can deduct your home office expenses, such as rent or utilities, based on the size of your office. Did you travel for business? Baggage fees and other related travel expenses are another tax break for the self-employed, according to US News.

 

Energy-Efficient Home Improvements

Many people know that the energy-efficient tax credit ended in 2010. Yet if you never took the tax break, you still have time to do so. There is $500 tax credit in place now, so if you went above certain spending limits then you won’t get as much as you expected.

 

Self-Employed Health Insurance Premiums

One of the bad things about being self-employed is that you aren’t getting health insurance plans through a company. The good news is that you can receive tax breaks on your health insurance premiums, long-term care insurance premiums and your dental premiums.

 

Casualty, Disaster and Theft Losses

Nobody plans to have their things stolen from their home or to suffer losses through natural disasters. If something like this happens to you, you can deduct such losses on your tax returns if you have the right documentation to prove you owned the items and that you lost them during a natural disaster or the items were stolen.

 

State Sales Tax Deductions

Live in a place where you paid state sales taxes? You can deduct this from your federal income taxes. For people who live in a state that doesn’t have sales taxes, you can deduct your state income taxes.

 

Costs For Taking Care for a Parent

If you have an elderly parent that you take care of by paying their expenses, and you can claim them as your dependent, you can deduct the costs from your taxes. You can even claim this tax break if your parents live in a nursing home or has an in-home nurse. Simply file Form 2441 to deduct these costs from your taxes, according to Boston.com.

 

Refinancing Points For Your Mortgage

You decide to get a mortgage for your new home. You get mortgage points for getting a loan that you can deduct immediately from your taxes. Yet tax breaks for refinancing points are a little different. If you qualify, you can deduct the refinance points for the new loan over the life of the loan if you use the money from the refinancing to make home improvements, according to Bankrate.

 

IRA Contributions Tax Break

Some people don’t have an employee-sponsored retirement plan like an IRA. If you are in this situation, you can deduct your contributions to a traditional IRA. The deduction is $5,000 for people under the age of 50 and $6,000 for people 50 or older.

 

 

Subscribe to Taxbrain