The Forgotten Tax Deductions
Would you like to be a hero to your taxpayers? Offer a few tips to them about deductions they may not know about. Include a list of possible deductions in a pre-season email reminder or include them in a list of hot topics on your website – this will help them prepare for their office visit and help them build their trust in you. Here are a few examples of those things taxpayers often miss…
- Volunteer Work. Expenses incurred while doing charitable work, such as mileage, meals, and uniform cleaning fees may be deductible.
- Job Hunting. Taxpayer who itemize and incur costs while job hunting that exceed two percent of the taxpayer’s adjusted gross income can deduct those expenses.
- Military Reservists’ Travel Credits. Reservists and members of the National Guard who travel more than 100 miles and stay overnight for training can deduct related expenses.
- Child and Other Care Credits. Summer child care costs for day-camps can be deductible. However, you cannot deduct expenses for sleep-away camps. Care expenses for adult dependents may also be deductible.
- Mortgage Refinancing. If a homeowner refinances and uses proceeds to improve their principal residence, they may be able to deduct the points paid on the loan for the year of purchase.
- Medical Expenses. Travel expenses to and from treatments, including mileage and meals, may be deducted if the taxpayer’s medical expenses reach the 7.5 percent of adjusted gross income threshold.
- Retirement Savings. Moderate and low-income taxpayers may be able to save as much as $1,000 on contributions to an eligible retirement account.
- Educational Expenses. There are many education expenses that can be deducted – tuition and fees, the Lifetime Learning Credit, and the Opportunity Tax Credit. If a taxpayer is pursuing any kind of education, it’s worth looking into.
- Energy-Efficient Home Improvements. There are still credits worth up to $500 for energy-efficient home improvements available for 2011 returns.
Taxpayers welcome any advice that may help them save money. These simple tips may make a big difference in their bottom line.