When its tax time, reducing your tax liability means making sure that you have received all your credits and deductions. Many individuals are concerned about itemizing deductions, seeing it as far too complicated for the average taxpayer. Therefore, it is important to considering a tax professional or accountant, such as HCS, LLC in North Richland, TX, to determine the deductions you qualify. Below are some of the deductions that could help you offset your tax liability, a few of which get overlooked often.
Tuition and Fees
Even if you choose not to itemize, you can still take a deduction of $4,000 in qualifying tuition and fees, even if they were paid for you, your spouse or even a dependent. However, the expenses must be for higher education only. Keep in mind, this deduction can only be taken if you file jointly as a married couple, but if you file separately or can be claimed as someone else’s dependent, then you will not be able to claim this deduction.
State and Local Sales Tax
You have the option of deducting either your state and local income taxes or your state and local general sales taxes. For those who live in a state without an income tax, you will want to take the deduction for your sales taxes paid throughout the year. However, most of the time, the state sales tax deduction will be greater than the deduction for just your state and local income tax.
Job Search Expenses
There are expenses that can be deducted for searching for a new job in your chosen field or most recent job. These expenses can be incurred even if you remained employed during the job search and it did not have to result in a new job. There are a variety of expenses that qualify under this deduction:
It is important to keep track of your receipts for anything done relating to your job search. However, this will not apply to any expenses incurred for an entry level position, if you are changing careers or fields.
Mortgage Insurance Premiums Deductions
While you know that your mortgage interest can be deducted, but depending when you purchased your home, you may qualify for this deduction. It allows you to deduct what you have paid in mortgage insurance over the course of the year. Work with your tax professional to determine if you are eligible for this deduction.
Home Renovation Deduction
Home renovation costs are not typically deductible. If you make changes to your home for a medical reason, however, it can be deductible. These types of expenses can include adding an entrance or exit wheelchair ramps and lowering cabinets for different accessibility purposes. They can be deducted as medical expenses. If they increase the value of your home, they will not qualify for a medical deduction. So you will need to be sure to determine if there has been any change in your home’s value as a result.
State, Foreign and Local Taxes
There are a variety of taxes that can be potential deductions, such as your state and local property taxes, any real estate taxes at the state, local and foreign level, along with your state, local and foreign income taxes. However, before taking any of these deductions, it is important to discuss them with your tax professional to determine if you are eligible for these deductions.
Non-Cash Donations
If you itemize your deductions, you can take a deduction for the fair market value of goods that you have donated to charity. These can include clothes, furniture, electronics and even a used car. However, you need to be sure to get a receipt and also to confirm its charitable status before you donate.
There are a variety of items that are available to individuals, you will want to work with your tax professional to determine which ones best fit your particular circumstances. There may be others that you qualify for, so be sure to share any major life changes, including divorce, home purchases, or the birth or adoption of a child. As you can see, there are many deductions, it is just a question of determining what you qualify for.
Click on the link below to be connected with a tax professional or accountant at HCS, LLC in North Richland, TX, to discuss what deductions you might be eligible for.
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