Commonly Overlooked Tax Deductions You Should Know About

Sat Feb 14, 2015 15:13:51PM
Navy veteran filing his taxesBy: U.S. Navy
Have you ever filed your taxes only to find out from a friend or colleague that you overlooked a tax deduction you knew nothing about? Most Americans are aware of the major deductions they are able to claim when they file their yearly tax returns, but there are a host of lesser known deductions that many taxpayers simply aren't aware of. These deductions range from the big to small and may wind up decreasing the amount you owe or increase your return if you remember to keep proper records throughout the year. Who knows? Maybe you've been overlooking a deduction that you qualify for.

Tax Preparation Fees

If you are someone who has your taxes done by a professional then you are able to deduct the cost of that on your tax return. You are only able to deduct the cost of the previous years tax preparation, which means you are able to deduct the money you spent to file your taxes in 2014 when you file this year. Please not that this deduction does not pertain to individuals who use free services to file their taxes.

Out-of-Pocket Charitable Contributions

It is commonly known that big charitable donations are tax deductible, but many Americans are unaware that they can claim a lot more of the good deeds they have done. Did you bake a cake for a nonprofit charity or use your personal car for a charitable cause? You can write off the ingredients for the cake and 14 cents per-mile you drove. You can see a full list of what qualifies as a charitable contribution at the IRS website.

Moving Expenses to Take New Job

Did you have to move further away than fifty miles to take a new job in 2014? If so, then you are able to deduct the expenses you incurred during your move. You are also able to deduct 23 cents per-mile plus parking fees and tolls you had to pay during your move.

Retirement Savings Contribution Credit

Setting aside money for retirement is always a great thing, but it also helps when it comes to tax season. If you set aside at least $2,000 into a 401k or a traditional or Roth IRA then you can claim up to $1,000 dollars on your tax returns. However, this credit does have strict income requirements. The more you make, the less you will be able to deduct. Please refer to IRS Form 8880 for further information on this credit.

Student Loan Interest Paid by Parents

This is a great deduction for those of you who are younger and whose parents are paying off your student loans. The IRS recently tweaked how they handle this and now treat it as if your parents gave you the money to pay your student loan debt. This means that you can deduct up to $2,500 of student loan interest being paid for by your parents.

There are many more deductions out there that are just waiting to be found by you. Browse the IRS website to see what you've been missing. You might have to dig a lot, but there are deductions out there waiting to be claimed by anyone who does the work of finding them!
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