Commonly Missed Tax Deductions
Oct 03, 2013
It’s nearing the end of the year and you know what that means… tax time! Most Americans are well aware of the more popular tax deductions and the need to keep charitable contribution receipts. However, there are a few lesser-known deductions that always take our clients by surprise. Here’s a list of the most commonly missed deductions:
Home Office: Generally, in order to claim a business deduction for your home, you must use part of your home exclusively and regularly as your principal place of business, as a place to meet or deal with patients, clients or customers in the normal course of your business or in any connection with your trade or business where the business portion of your home is a separate structure not attached to your home.
Casualty Losses: Generally, you may deduct casualty and theft losses relating to your home, household items and vehicles on your federal income tax return. Some restrictions apply.
Mortgage Refinancing: The IRS allows for a ratable deduction of the points paid during refinancing.
Educator Expenses: If you are an eligible educator you can deduct up to $250 of any unreimbursed expenses you paid or incurred for books, supplies, computer equipment, etc that you use in the classroom.
Financial and Tax planning: The Internal Revenue Service will let you deduct certain investment expenses you incur on your taxable investments and any fees incurred during tax preparation and planning.
Capital Losses: Up to $3,000 in stock, mutual fund and other capital investment losses can be deducted on your personal return every year.
Child and Dependent Care Expenses: Individuals who pay for day care expenses for their children or disabled adult dependents may be eligible for a federal tax credit of up to 35% percent of the cost of daycare.
Transportation Deduction: If you work at two places in one day, whether or not for the same employer, you can deduct the expense of getting from one workplace to the other. Some restrictions apply.
Moving Expenses: Taxpayers that qualify may fully deduct the costs of moving. To qualify they must meet a 3 part test set by the IRS.
This is only an overview of some of the possible deductions that taxpayers fail to consider. There are many, many other deductions available and all of the deductions mentioned have restrictions attached to them (some are listed and some are not). For more information on these deductions you can contact your tax advisor.
Courtney Elgin, CPA