It’s that dreaded time of year again, tax season. The April 15 deadline is quickly approaching and here are a few tax breaks that many taxpayers overlook which can help keep a few extra shekels in your family’s pocket.
For those of you self-employed health insurance premiums are deductible as well as transportation expenses to doctor’s offices or medical facilities.
Medical expenses incurred at a nursing home are also eligible as are hearing aids, orthopedic shoes and eyeglasses.
Did you go on a diet this year? Weight loss programs prescribed by a doctor also qualify for a deduction.
Can you hear me now? Cell phones required for business can carry a deduction.
Were you in the giving mood in 2013? Goods donated to charity are on the list. Sure many of us know to include the check we wrote for the various causes we support throughout the year but few people know that giving clothes to good will or baking goodies for fund raisers is also deductible!
Travel expenses incurred to get to and from the market are eligible as well. It is important to remember when emptying your closet and dumping into the many big charitable bins put out by various groups, to get a receipt for the goods or clothes you dropped off.
Car mileage is a deduction of 14 cents per mile and includes tolls and parking.
Traveling expenses are also deductible for job searches. If at some point you were one of the many unemployed in 2013 until the pounding the pavement finally landed you a job, don’t forget to deduct from those life saving paychecks the travel costs you spent to get hired. Metro cards, new clothes for interviews, gas for the trip are all a deductible expense.
Self employed? If you traveled this year on business and incurred baggage fees and other airport or airline add-ons to your required travel, remember to include them in your travel expense listing, include receipts from cab fares to and from the airport as well.
Did you purchase new office equipment? You are allowed a 50% deduction on items like laptops, copiers, electronic tablets and any other pieces of equipment that went into service in 2013 for your home business or office.
On your way to work did you drop off the little one at day care? The child-care credit is more valuable than a deduction because it offers a dollar for dollar offset. Money spent to care for your child while you are working is deductible.
Are you beginning or in the middle of your student loan payback? – The interest paid on the loan is deductible.
Did you know accounting or legal fees involved with preparing taxes are also a deduction?
Energy saving credits – did you install a natural gas heater or solar energy device? Have you upgraded your windows which save energy? If so, this expiring credit is still good for 2013.
American opportunity credit – all four years of your education expenses are deductible.
This tax credit is based on 100% of the first $2,000 spent on qualifying college expenses and 25% of the next $2,000 ... for a maximum annual credit per student of $2,500.
Reinvested dividends - If you allow your dividends to be directly reinvested into your mutual fund to buy more shares you will owe less in taxes.
This isn't a tax deduction, but rather an important subtraction. Increasing your tax basis in the fund through reinvestment, in turn, reduces the taxable capital gain (or increases the tax-saving loss) when you redeem shares.
Forgetting to include reinvested dividends in your basis will result in a double taxation of the dividends—once when they were paid out and immediately reinvested and later when they're included in the proceeds of the sale. Don't make that costly mistake.
State sales tax, you may have heard that the deduction for state sales taxes was slated to expire. It was, but was reinstated and therefore still available to taxpayers. You’re allowed to deduct either state sales taxes or state income taxes, whichever helps most. You should absolutely compare the two especially if you bought a big-ticket item in 2013, like a car.
This article is for information and insight only and is not meant to instruct on specific deductions. All deductions should be confirmed with an experienced tax preparer.