4 Commonly Overlooked Tax Deductions Not to Miss
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If you’ve not checked the calendar recenty, it’s time to start preparing your taxes. That also means something else – looking for overlooked tax deductions you might have missed throughout the past year. Thankfully we have a good CPA who helps us stay on top of deductions, though we still have to track them so we don’t miss any opportunities.
I generally keep good records, but always like to make sure I’m not missing any commonly overlooked tax deductions that can help us save money. As I know that I’m not the only person looking for tax deductions for 2016, I thought I’d share a few of the common ones to make filing your taxes a bit easier.
Before I go over my list of overlooked tax deductions, just remember I’m not a tax professional. If you have any questions about your situation, ask a tax professional. 🙂
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 a few years ago. He moved 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 he incurred it resulted in a nice 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 to make sure you qualify.
Did you make any home improvements last year? The better question is, were any of those energy efficient improvements? We remodeled our bathroom a few years ago and unfortunately it didn’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 2016, 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?
Giving to charity is important to help those in need. You also get a tax benefit, in many cases, from it. That being said, if you want 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.
It’s always a challenge to know what to value donations to places like 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 2016 tax deductions that I pay particular attention to are those that qualify as self-employed tax deductions. If you’re self-employed like I am, 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 are 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 – check eHealthInsurance to make sure you’re getting the best rates possible
- Annual fees for business credit cards
- Conference registration fees
- A percentage of our cell phone charges. If you’re paying too much on your cell phone bill, check out Republic Wireless, with plans starting at $10 per month
- Costs associated with designing and creating a website
- Tax or accounting software, like H & R Block – there may be cheaper options available if you prepare them yourself, such as TaxACT, E-File or eSmart Tax. Some of them, like TaxACT or eSmart Tax may be free of charge!
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 at Discover Bank until we decide what to do with them.
Be careful not to overlook any deductions as you prepare your taxes. They may not seem like they’ll do anything, but you’d be surprised how much money they can put in your pocket instead of going to Uncle Sam.
Additional resource: If you’re looking for a simple way to stay on top of all your finances, then check out my favorite 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?