Navigation

4 Commonly Overlooked Tax Deductions Not to Miss

Disclosure: This article contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. For a full explanation of our Advertising Policy, visit this page for more information.

Commonly overlooked tax deductions are easy to miss, but can help save money come tax time. Here are 4 overlooked tax deductions not to miss for 2016.

If you’ve not checked the calendar recently, it’s time to start preparing your taxes. That also means something else – looking for overlooked tax deductions you might have missed throughout the 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 keep pretty 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 2017, 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 for individuals 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.

Home Improvements

 

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, but some might still be available to use. 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. If you want to take one of these often 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 2017 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 for small business owners 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 – here are some that may have lower annual fees
  • 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 $15 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 TaxACTE-File or Liberty 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 for entrepreneurs you can 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 Synchrony Bank until we decide what to do with them as they pay at least 1.85% on our cash.

Commonly overlooked tax deductions are easy to miss, but can help save money come tax time. Here are 4 overlooked tax deductions not to miss for 2016.

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. 

Open your free Personal Capital account today!

 

Have you started preparing your taxes yet? What is another overlooked tax deduction that you can think of that would be helpful to know?

The following two tabs change content below.

John is the founder of Frugal Rules, a dad, husband and veteran of the financial services industry whose writing has been featured in Forbes, CNBC, Yahoo Finance and more.

Passionate about helping people learn from his mistakes, John shares financial tools and tips to help you enjoy the freedom that comes from living frugally. One of his favorite tools is Personal Capital , which he used to plan for retirement and keep track of his finances in less than 15 minutes each month.

Another one of John's passions is helping people save $80 per month by axing their expensive cable subscriptions and replacing them with more affordable ones, like Hulu with Live TV.

9 Comments

  • Very helpful tips here, John – I would not have thought of the newspaper and journal subscriptions! We are slowly learning what is deductible in regards to our small business, and have started doing things like hiring our oldest to help out with our workload in order to make our business run more efficiently and keep some more of our earnings within the pockets of our family.

    • John says:

      Glad to be of help Laurie! That is an easy one to overlook – but if it applies to the industry you’re in then it should easily qualify. That’s AWESOME you’ve hired your oldest to keep the earnings within the family, we plan on doing the same thing – it’s a no brainer in my opinion.

  • I have not started ours yet (it is on my to-dos for next week, so if I start blogging lots of rants you will know why), but this is the first year with a company to consider, so this was really helpful. I have decided to go through the process myself this first year so I could “understand” the ins and outs as much as possible. Worst case scenario, I will reach out to my accountant friend, but I feel as though you don’t really understand the process until you go through it yourself.

    • John says:

      Lol, I’m hoping our return doesn’t result in any rants of their own. 🙂 That said, glad to be of help. I did the same thing the first year or two as I had always done our taxes. I did find that it was helpful to do that so I could understand what was going on more in depth, until it became too much for me to handle confidently. That’s awesome you have someone to reach out to if you have the need!

  • Money Beagle says:

    Good tips. I have a CPA that does our taxes and he always picks in to our information and asks questions to make sure we haven’t forgotten thing. I always do my own ‘estimate’ and he’s never failed to deliver a higher number on our return, and it’s all stuff that’s on the up and up, just that I may have forgotten or not understood.

    • John says:

      Thanks MB! I do much of the same thing with our CPA. He generally gives us a framework to operate from each year and I operate off of that. It’s always nice to get that pleasant surprise.

  • We’ve still yet to itemize our taxes, but maybe someday we can start taking advantage of these sort of deductions. I think 2014 may be the year!

    • John says:

      We didn’t itemize for 2012 taxes, but did the previous year. It’s looking like we’re going to have another itemizing year this year though.

  • Jayleen says:

    I need to check out that calculator for donations. It seems like such a pain that we don’t usually count them. We do track our miles when doing volunteer work and going to doctor appointments.

Leave a Reply

Your email address will not be published. Required fields are marked *