April might be the month that flowers start blooming across the country and the weather gets warmer, but most of us are too busy preparing our tax returns to notice. With the April 18th deadline quickly approaching, make sure that you don’t forget to include some key tax deductions that could save you a significant amount of money.
Here are some tax saving deductions that are often forgotten:
Education Tax Credits
Whether you paid for your own schooling or for the schooling of your children, be sure to take advantage of your educational tax credits. Through the American Opportunity Tax Credit, you can claim up to $ 2500 per year per student. This credit is linked to your income level and phases out for higher income earners. There is also the Lifetime Learning Credit but you can only claim up to $ 2,000 per return. It too is connected to income and phases out for higher tax brackets.
Out-of-Pocket Charitable Contributions Deduction
If you’re a volunteer for a local charity or if you provide services for your child’s school for free, then you can potentially deduct some of your out-of-pocket expenses. For example, if you drive your car for a charity, you can deduct 14 cents per mile and also the cost of parking and tolls. If you buy something for a fundraiser or charity that isn’t reimbursed, then you can claim these expenses on your tax return. Be sure to keep your receipts and if the amount is over $ 250 you will need a letter from the charity.
Student Loan Interest Tax Deduction
If you paid interest on your student loans last year, you can likely claim a tax deduction. This deduction permits you to claim as much as $ 2,500 in interest payments per year but phases out depending on your income. Even if your parents are making the payments, as long as the loan is in your name you can still claim the deduction. And, you can even deduct you student loan interest after refinancing student debt.
State Sales Tax Deduction
When you’re filing your taxes, you can choose to either deduct your state income tax or your state sales tax. For residents of states that do not have an income tax, the choice is easy. For those in states that do, you can easily decide which to claim using a calculator that the IRS provides you showing deductions based on income level. If you purchased a large ticket item such as a new car, a boat, or a plane then it likely make sense for you to deduct your state sales tax and include this additional purchase on your return.
Job-Hunting Costs Deduction
If you were looking for a job in 2015, then you can likely deduct the expenses related to that job search. Some caveats are that the job search must be in the same line of work as you were previously working as you cannot deduct expenses for a job search in a new occupation or if you’re looking for your first job. Expenses that can be deducted include travel expenses, resume costs, and fees paid to a placement agency.
Moving Expenses Deduction
If you recently graduated and had to move to start your first job in another city or if you moved for work, you might be able to deduct your moving expenses. In order to qualify, the timing of the move must be closely related to the day you start work and your job location must be at least 50 miles from where you previously lived.
Self-Employed Health Insurance Deduction
If you’re self-employed and you pay for your own Medicare or health insurance premiums or expenses, then you can deduct some of these costs against your income through the Self-Employed Health Insurance Deduction. You can also deduct some of the costs of long-term care insurance and long-term care services.
Child and Dependent Care Credit
If you have children under 13 or a dependent who is physically or mentally incapable of self-care, then you shouldn’t miss out on the Child and Dependent Care Credit. This tax credit is worth a percentage of the total qualified childcare or disability care costs that you incurred while you worked. The downside is that you can only claim expenses of up to $ 3,000 for one qualifying individual and up to $ 6,000 for two qualifying individuals.
Business & Finance Articles on Business 2 Community(30)
