When filing your taxes, you want to take every opportunity possible to save money on expenses that can reduce your taxable income.
“Deductions are sometimes available on health programs and treatments such as smoking cessation, weight loss and alcohol and drug abuse, if it is not covered under your current health insurance policy,” says Ellsworth Buck, Vice President of GreatFlorida Insurance, Florida’s largest independent healthcare insurance agency.”
Below is a list of some commonly missed tax deductions and credits that could be available to you.
- State and Local Sales Tax Deduction– Floridians do not pay a state income tax making taxpayers eligible to deduct state income tax paid on purchases. If you purchased a large item such as a car or boat, you can add the sales tax paid to the amount sown on the IRS tax table.
- Charitable Contributions-Money donated to your church, a charity or even if you purged your closet or home of household items and dropped them off at Goodwill, those can be counted. Out-of-pocket expenses such as food ingredients needed to prepare meals for a soup kitchen or if you drove your car for charitable activities, you can deduct 14 cents per mile.
- Tuition-There are Hope and Lifetime Learning Credits, as well as the American Opportunity Tax Credit available for those taking classes. A tax credit is available for tuition, fees, books and other educational supplies for you, your spouse or dependents.
- Health Insurance-“Health insurance premiums for self-employed people, are 100 percent deductible from their gross income,” reports Buck from GreatFlorida Insurance.
- Job Relocation-Your moving expenses are deductible if you took a first job and moved more than 50 miles away. You can deduct 23 cents per mile of getting you and your household goods to the new area, including parking and tolls.
- Casualty, Disaster and Theft-Casualty, disaster and theft losses can be deducted on your tax form, but the IRS has some stipulations. The IRS states, “You may not deduct casualty and theft losses, (generally covered by homeowner’s insurance) unless you reduce the loss by the amount of any reimbursement or expected reimbursement.”
- National Guard-National Guard and Reservists can claim overnight travel expenses.
- Gambling Losses-Your losses cannot surpass your winnings, which must be reported.
- Child Care-A child care tax credit is offered, worth 20 – 35 percent of what you pay in childcare while you work.
Financial management company, Intuit suggests a tax credit is better than a tax deduction because it reduces your tax, dollar-for-dollar. As painful as filing your taxes is, take your time to think back over your finances for the year to save money on your taxes.