It’s the start of a new year and tax season is just around the corner. Now is the time you will want to start getting all your tax preparation information together. While doing so, you’ll want to make sure that you’re taking all the legal deductions that you can, especially if you’re self-employed, own a business, or do your own taxes.
According to Jackson-Hewitt Tax Preparers, there are at least 50 bona fide deductions that tax payers leave on the table every year and wind up paying more taxes than they should. Of course, not all of them will apply to your particular tax situation, but you may find a few more deductions than you thought you could take.
For example, did you know that a weight loss program, gym membership/exercise/swimming class program are tax-deductible if your doctor advised you to lose weight to treat a medical problem like diabetes, heart disease, joint problems, et al? Or, that you could deduct the cost of a new mattress if it’s needed to help alleviate an arthritis condition? Or, the cost of special foods to make specific diet changes related to treating a diagnosed illness like Crohn disease, diabetes, heart disease, etc? And there’s a lot more…
The main categories of tax deductions that people leave behind are:
1. Medical-health related
2. Job related
3. Personal property related
Here are just a few of those 50 deductions from each category that many taxpayers leave behind. See how many you qualify for:
Medical-health: Hearing aids, glasses, contact lenses, special shoes, canes, and assistive device that helps a diagnosed condition. Special furniture related to alleviating specific diagnosed conditions, e.g., reclining chair, mattresses, etc.
Job related: Expenses related to job-seeking in your present field of employment; professional books, journals, magazines, newspapers that you peruse for your particular job, or buy looking for employment in your field; education (online, in-person classes, seminars, conferences) and/or research that further your job skills or help you complete your job; long distance telephone calls to prospective employers; transportation costs (vehicle maintenance, mileage/etc, to job sites where you do work if you’re an independent contractor; mileage costs to interviews). Also public transit fees, parking fees and toll road fees.
Personal property: General casualty and theft losses over $100, and/or totaling more than 10% of adjusted gross income. Taxes on cars, boats, etc, state sales tax (if your state doesn’t have a state income tax), reinvested dividends (not really a deduction, rather a subtraction that can save you tons of money, claiming prevents double taxation of the dividend), out-of-pocket charitable deductions – like the stamps you bought to help send out mailers for your local school’s fund raising initiative; food ingredients you bought to make food items for charity auctions/events (keep your receipts, if it totals over $250, you’ll also need a letter documenting the support you gave). You can also deduct 14 cents a mile for any charity-related driving you did.
Miscellaneous: Worthless stocks or securities. Hobby expenses if your hobby brought you any taxable income during the year, or you donate your hobby product somewhere and they sell it for profit; student interest loans – are you co-signer for your kids’ college, technical skills program loans?
Even if you have a professional tax preparer or accountant do your taxes each year, you’ll want to ask about certain new deductions that may have arisen this past year, or existing ones that you feel you may qualify for. You might want to check Jackson Hewitt Tax preparers list of 50 deductions, and/or James Maertin, C.P.A.’s list as well (see Sources below).