For many individual taxpayers, the only thing worse than having to meet with your tax professional to file your taxes is finding out that you paid more tax than you needed to. While a local tax preparer, such as James Wells EA MBA Tax Office in Santa Cruz, CA, can assist you in finding all the deductions you are entitled to, it is important to know about these potential deductions as you collect documentation throughout the year.
Even if you are getting ready to file, it is still worth it to know about these deductions, as you might be able to find those old receipts.
Tax Preparation Fees
While it might seem unlikely, you can deduct the cost of using a tax preparer on your Schedule A. This deduction does not apply for free online tax preparation services, you can use it for any type of paid services, such as working with a professional from James Wells EA MBA Tax Office. This only applies to the fees incurred for the year you are filing. So it is important to remember that if you are filing your 2015 return, you can only deduct fees paid for filing your 2014 taxes.
Under miscellaneous deductions, there is a place for you to claim hobby expenses. Just keep in mind that you can only deduct as much as you received in income. If your hobby generated $400 in income, but you had $800 in expenses, your deduction is limited to the $400. This deduction is in place for those who also have a small business that does not turn a profit for three years, allowing them to deduct some of the expenses.
The miscellaneous category can include a myriad of viable deductions, including legal fees for an attorney who is pursuing taxable income or the collection of any tax. If you are pursuing alimony, then that can be deducted, but not an attorney who is working in your behalf to gain custody of belongings or property. There are limits to how much you can deduct, and as with most of these deductions, they must be taken for the same year you incurred the expense.
Every teacher understands that purchasing additional supplies for their classroom is part of the job. As a result, you can deduct what is defined as ordinary or necessary back to school supplies. If you and your spouse are educators, then you will both be able to take this deduction. Talk with your tax professional at James Wells EA MBA Tax Office to find out how much of this expense you can deduct.
Many of us know to hang onto those receipts for donations of cash and goods to various charities, but most of us do not realize that mileage driven for volunteer activities can also be deducted. Keep a notebook that tracks your mileage and note the reason or errand, along with any parking or toll fees. If you use public transportation, track those costs as well.
If your home or car suffered damage due to a weather event or other natural disaster, you may be able to deduct the amount of your loss that was not covered by your insurance company. While this might not be a large deduction, it is still worth confirming with your tax preparer during your filing process.
While there might be dues in addition to the property taxes on your timeshare, it is important to check your statement to see if they are separated out. If they are, you might be able to claim those property taxes. However, if the property was sold during the past year, check your settlement statement for the property taxes paid during the period you owned the timeshare, because they might be able to be deducted as well.
If you paid state taxes that were owed in the last year, you might be able to deduct those payments on your current tax filing. Just remember that this is also dependent upon the state that you lived in, as not all states collect an income tax.
Finally, it is important to work closely with your tax professional to determine what deductions might apply to your specific return. Call or click on the link below to be connected with the accountants and tax professionals at James Well EA MBA Tax Office located in Santa Cruz, CA.
James Wells EA MBA Tax Office