12 Overlooked Tax Deductions That Could Save You Thousands
Everyone loves finding new ways to save money. When it comes to taxes, there are plenty of lesser-known deductions that could help you get some cash back into your wallet. These tax hacks are simple and straightforward, giving tips that anyone can follow. You just need to know where to look and how to find the best refunds and deductions possible! Check out all 12 of these valuable ways that you can lower your taxes and get more of your hard-earned money back into your pocket. Tax season will be a little bit more rewarding when you have these tricks on hand!
Note: The content of this article is for informational purposes only and is not a substitute for professional advice. Always consult with a qualified professional for advice tailored to your individual circumstances.
Home Office Deductions
Do you work from home? It would help if you took advantage of this lesser-known tax deduction. Even if some of your work is done out of your home, you may qualify to deduct some of your home expenses. Based on the size of your home office, you can deduct a percentage of your standard home expenses like rent, utilities, and insurance.
Self-Employees Health Insurance
While we are looking at deductions you can make related to work, let’s talk a little about health insurance deductions. If you are self-employed, you can actually deduct 100% of your health insurance premiums for you and everyone covered under your plan. This will reduce your taxable income and help you get more of your hard-earned money back into your bank account.
Educator Expenses
Teachers and educators can make some serious tax deductions as long as the expenses relate to their classroom and position. Teachers can write off any classroom supplies that they purchase out of pocket. Things like markers, folders, paper, and even a comfy new desk chair can all be deducted. Hold on to those receipts, teachers, as they will come in handy when tax time rolls around!
Job Search Expenses
Anyone looking for a new job is likely also looking to save a little money. That is why you need to write off any job search-related expenses and get some cash back at tax time. Any of the costs associated with looking for a new job can be deducted. Things like resume services, travel expenses, and even new interview clothes will qualify. You can make these deductions even if you didn’t get the new job.
Student Loan Interest
If you are paying off your student loans, you must deduct those payments from your income. You can deduct up to a whopping $2500 in student loan interest each year as long as your income falls below a certain limit. There are no separate student loan interest forms you will need to fill out, making this deduction nice and easy! This is one deduction that anyone who pays interest on a student loan needs to take advantage of.
Medical Expenses
Were you hit with some serious medical expenses this year? If you had to pay for those expenses out of pocket, you can use them for a tax deduction. Unreimbursed medical expenses over 7.5% of your adjusted gross income can be deducted when you file your taxes. This doesn’t have to be one large expense, either. Everything from general doctor visits to monthly prescriptions can be added up and deducted. Once again, keep track of those receipts throughout the year, as they will come in handy at tax time!
Gambling Losses
If you had some serious gambling losses this year, you might want to look into this interesting tax deduction. You can deduct all of your gambling losses but only up to the amount of your gambling winnings, which means those winnings also need to be reported. However, this can offset the winnings which you are technically required to report as income. Reporting the losses along with the winnings will reduce your income and help you save on your taxes.
Energy-Efficient Home Improvements
It is a great time to update your home and make it more energy efficient, especially when you can write off a lot of those improvements to your annual tax refund. Adding solar panels to your house, upgrading appliances, or replacing your windows will all give you tax credits. These credits will reduce your overall tax bill and hopefully get you some cash back. Think of it as a discount on the investment you made into your home!
Jury Duty Pay Given to Employer
If you were called into jury duty this year, you should look into this lesser-known tax deduction. Some employers will continue to pay your regular salary as you participate in jury duty. However, you will also get a small amount of pay from the government, which employers will often make you hand over. At the end of the year, you can deduct the total amount of jury duty pay you handed over to your employer and save a little bit of cash.
Child Care
Most people with children may already know about this important tax deduction, but it is worth mentioning. You may be able to deduct a portion of your child care expenses, reducing your taxable income and helping make child care a little more affordable. You can deduct the cost of after-school programs, nannies, and daycare. You can deduct these costs if you are working or even if you are just looking for work.
Moving Expenses
You used to be able to deduct most, if not all, of your moving expenses, but that has all changed. Now, only one specific group of people can deduct moving expenses from their taxes at the end of the year- Military personnel. If you are an active military member, you can deduct all your moving expenses if you have not already been reimbursed by the government. Deduct the cost of the moving truck, the cost of shipping a car, and even the travel and lodging expenses you incur during the move.
Past Paid State Taxes
If you owed taxes on your state return last year, you can write off that amount on this year’s return. Add the amount to your itemized deduction this year, along with any state taxes that were withheld from this year’s paycheck. This will greatly reduce your annual income and help you get more money back! The limit is quite high, so you may be able to get a serious deduction.
