Tax season is just around the corner and we want you to keep more of your hard-earned money in your pocket.
Here are our 10 most ignored tax deductions. If a deduction is legitimate and you have the documentation to prove it, take it.
- State sales taxes
IRS has tables for residents of states with sales taxes showing how much they can deduct. Use this IRS tool to calculate your Sales Tax Deduction.
- Reinvested dividends
If you have mutual fund dividends automatically invested in extra shares, this will reduce the amount of taxable capital gain (or increases the tax-saving loss) when you sell your shares. Ask your Tax professional or CPA if you qualify for this deduction.
- Charitable donations
Did you drive your car for your company’s charity event in 2017? Then you qualify to deduct 14 cents per mile. Did you feed the homeless with your family? You can deduct the food expenses and miles.
- Interest on student loans paid by Mom and Dad
If Mom and Dad pay back their child’s student loan, the IRS considers it as though the parents handed the money to their child, who then paid the loan. So, as long as the child is not claimed as a dependent; he or she can qualify to deduct up to $2,500 of student loan interest paid by his/her parents.
- Moving expense to take first job
Moved more than 50 miles? You qualify to deduct 23 cents per mile of the cost of getting yourself and your household goods to the new location, (plus parking fees and tolls) for driving your own vehicle.
- Child and Dependent Care Tax Credit
The law allows you to run up to $5,000 of such expenses through a tax-favored reimbursement account at work. However, up to $6,000 can qualify for this credit.
- Earned Income Tax Credit (EITC)
According to the IRS, 25% of taxpayers who are eligible for the Earned Income Tax Credit fail to claim it. Did you lose your job? Took a pay cut? Or worked fewer hours last year? You may qualify for this credit even if you are not a low-to-moderate income workers.
If you were eligible to claim the credit in the past but didn’t, you can file anytime during the year to claim an EITC refund for up to three previous tax years.
- State tax you paid last spring
Did you owe money after your filled your 2016 tax returns in 2017? Then (assuming that you paid it), include the amount you paid last spring with your state tax itemized deduction on your 2017 return.
- Refinancing mortgage points
You can deduct 1/30th of the points a year if it’s a 30-year mortgage—that’s $33 a year for each $1,000 of points you paid.
- Jury pay paid to employer
If you gave the money you received from attending or performing your civic duty to your employer, you have a right to deduct the amount so you aren’t taxed on money that simply passes through your hands.
Take advantage of all this tax deductions and credits. More importantly, hire an experienced and professional Tax Preparer, Enrolled Agent or CPA to help ensure you don’t miss any of the deductions or credits you deserve, so you get your biggest refund, guaranteed.