Itemizing your deductions can be a great way to reduce the amount of taxes you pay, but it does require a lot more work than taking the standard deduction. If you have not researched the tax codes thoroughly, there is a good chance that you have missed some valuable deductions. Here are ten of the most overlooked tax-deductible items.
1. State Sales Taxes
In states like Texas, where there is no state income tax, you can deduct the amount paid in state sales tax from your federal taxes. If you have kept receipts for all your purchases, you can deduct the actual amount, or you can use the table that the IRS provides to estimate the deduction while adding in the taxes for any big-ticket items you have purchased like cars, homes, or home renovations.
2. Expenses for Volunteer Work
Certain charitable contributions beyond direct donations to charity can also help to lower your tax liability. This can include things like materials or supplies that you buy for an event, or the gas that you use traveling to an event. You can deduct your out-of-pocket costs, as well as 14 cents per mile for travel, or the actual cost of gasoline, whichever is higher.
3. Student Loan Interest
If you paid student loan interest in the past year on a loan that you or a dependent took out, you can claim up to $2500 on your taxes, or the actual amount if it is less, though you can’t claim the deduction if you are married but filing separately, or if you can be claimed as a dependent on another person’s return.
4. Retirement Savings
The Saver’s Credit allows you to deduct up to $2,000 for married couples or $1,000 for single filers for contributions to IRAs or 401k accounts, as long as your income falls below the threshold of $73,000 for married couples filing jointly, $54,750 for head of household filers, or $36,500 for anyone else.
5. Gambling Losses
If you lose money playing the lottery, buying scratch-off tickets, gambling at a casino, or betting legally on things like the Super Bowl, those losses may be tax deductible as long as they are well-documented.
6. Moving Expenses
Military personnel who are permanently relocated by order of the military can deduct the costs of travel and lodging incurred during the move, the costs to move household goods, as well as the costs to move pets and cars.
7. Child and Dependent Care Credit
If you were working or searching for a job in the previous year, and you needed to pay for care for children under the age of 12, or disabled dependents of any age, that amount may be tax deductible. This can include summer camps or daycare programs.
8. Home Office Expenses
If you work or run a business from home, a portion of the amount you spend on your mortgage, property taxes, and utilities can be deducted, as long as you have a dedicated office space that is used exclusively for that work.
9. Health Care Costs
If you are self-employed and paid for healthcare yourself, you can deduct your healthcare premiums. If you are not self-employed, you can deduct the amount of the health care premiums after taxes.
10. Medical Expenses
If you have unreimbursed medical expenses, including travel, that total more than 7.5% of your adjusted gross income, those expenses may be tax deductible.
Tax Planning & Preparation Services in Dallas
When you need a skilled tax expert to help you navigate complex tax codes, determine what is tax deductible, and save money on your taxes, talk to our team at Gurian CPA. We serve customers in Dallas, Houston, and the surrounding areas. We can help with tax planning and preparation for individuals, as well as business taxes, accounting, bookkeeping, payroll, and more.
Call (469) 306-9866 to learn how Gurian CPA can help you save money on your taxes!
