4 Commonly Overlooked Tax Deductions Not to Miss
If you’ve not checked the calendar lately, it’s time to start preparing your taxes. We turned our information over to our tax person a few weeks ago and we were busy as usual searching for overlooked tax deductions we might have missed throughout the year.
I generally keep good records, but wanted to make sure that I wasn’t missing commonly overlooked tax deductions that would benefit us and hopefully result in a good response from the IRS. As I know that I’m not the only person looking for tax deductions for 2014, I thought I’d share a few of the common ones as well as tax deductions we were able to claim for the first time.
Before I go over my list of overlooked tax deductions, I will give the disclaimer that I am not a tax professional, so make sure you discuss specific questions with a professional who knows your situation.
Did You Change Jobs Last Year?
One of the more commonly overlooked tax deductions is related to changing jobs. I did not change jobs this year, but I have a younger brother who did. He ended up moving just over 1,000 miles for his first job out of college. While he hated moving, a lot of those expenses are tax deductible. If you’re a college student and staying local, the moving costs likely aren’t tax deductible, but when you look at the gas and lodging costs that he incurred it’ll add up to a nice little deduction for him.
Even if you didn’t change jobs, there are some tax deductions you could be overlooking, such as:
- Uniforms required by your job
- Professional newspaper and journal subscriptions related to your industry
- Union dues
Those are but a few of the overlooked tax deductions that might be open to you, just make sure and do your homework prior to taking them.
Did you make any home improvements last year? The better question is, were any of those energy efficient improvements? We remodeled our bathroom and unfortunately it doesn’t qualify, but if you purchased things like a new air conditioner, furnace or water heaters you may qualify for one of these tax deductions.
If you think you’re able to claim one of these tax deductions for 2014, there are a few things to keep in mind:
- The improvement must be energy efficient
- There are spending limits per item and as a whole
- Many of these expired at the end of 2013
With that last point, many were done away with at the end of 2014, so make sure you take advantage of the potential savings. Don’t miss this overlooked tax deduction, especially if it could improve your tax standing.
Did You Give to Charity?
I will give the disclaimer that your primary motivation for giving to charity really shouldn’t be to get the tax benefit, but to help others. That said, if you’re wanting to take one of these overlooked tax deductions be mindful that unless you itemize your taxes then you’re not able to claim charitable donations as deductions on your taxes.
Many think of charitable giving as simply taking a few things to the Goodwill. While that does qualify for a tax deduction, there are others that would fit in the commonly overlooked tax deductions category, such as: mileage driven to drop off charitable items, meals, accommodations and travel (IF that takes you far from home) and parking costs if it takes you far from home.
The one thing I always struggled with was how to truly value donations, especially for donations to Goodwill. I found this handy little chart they provide which gives the amounts they value items at. So, make sure you value that sweatshirt at $5 as opposed to the $50 you’d like to.
Overlooked Tax Deductions for the Self-Employed
The 2014 tax deductions that I paid particular attention to are those that qualify as self-employed tax deductions. If you’re self-employed like I am, then you’re always wanting to find those overlooked tax deductions as it directly means more money for you.
Tax deductions for self-employed individuals are going to vary depending on whether or not you work from home, work entirely online or work in an office running a business. Since we work from home and primarily online, following are some of the tax deductions we were able to take:
- Expenses for supplies and products needed to run your business
- Web hosting fees for this blog and our business site
- Health insurance premiums
- Annual fees for business credit cards
- Conference registration fees
- A percentage of our cell phone charges through Verizon
- Costs associated with designing and creating a website
- Tax or accounting software, like H & R Block
These are just a few of the tax deductions we’re able to take because we’re self-employed that help us lower our taxable responsibility. If those don’t fit your situation, my favorite overlooked tax deduction you could also take is for those pesky baggage fees airlines charge when you travel for business. I’m really hoping that we were able to take enough in terms of tax deductions so we end up not owing too much to the government. If we get pleasantly surprised, then those funds will likely just go straight in to our savings account until we decide what to do with them.
As I stated in the beginning, please speak with a tax professional if you have specific questions regarding your tax situation. Please also remember that some of these overlooked tax deductions may not apply to you if you don’t itemize your taxes.
Additional resource: If you’re looking for a simple way to stay on top of all your finances, then check out my favorite new tool – Personal Capital. Completely free, it allows you to track your spending, monitor your bank and investment accounts and watch your net worth plus many other tools.
Have you started preparing your taxes yet? What is another overlooked tax deduction that you can think of that would be helpful to know?