Tax Benefits
You Might Overlook
As the tax season approaches take some time to determine if you qualify for some of these often overlooked tax breaks. Some of these tax saving ideas require that you itemize your deductions. Others can be claimed by any qualifying taxpayer.
- Charitable Volunteering
If you volunteer for a charitable organization you may have deductible expenses. Did you purchase supplies or required equipment? Perhaps you volunteer in a hospital and need to purchase a uniform. The costs for the apparel AND the costs to clean the uniform can qualify as charitable deductions. And don’t forget mileage, it too can often be deducted.
- Moving Expenses
While job related moving expenses are a well known deduction, many clients don’t realize moving expenses for a first job may also be deducted if the job passes a 50 mile distance test from the place the newly employed person has been living.
- Job Hunting Costs
Workers can often deduct job hunting costs provided the expenses are associated with looking for a new job in your present occupation. Qualifying costs include resume preparation, printing, postage, phone calls and outplacement/employment agency fees. Remember these costs, along with other miscellaneous itemized expenses, must exceed 2 percent of your adjusted gross income before they produce any tax savings.
- Child and Dependent Care Credit
Did you know the popular Child and Dependent Care tax credit also applies to summer day camp costs? As long as the camp is a day-camp and camp officials supervise the child while the parents work you can claim the credit for the camp costs.
- Mortgage Refinancing Points
If you refinance your house or buy a second residence, any “points” you pay for the loan can be deducted proportionately each year over the life of the loan. If you sell your home or refinance before you have deducted the full cost of your “points”, you can then deduct the remaining amount in the year of the refinancing or sale.
Caution: The lender in the subsequent refinancing must be different to deduct the points this way.
- Military Reservists’ Travel Expenses
Military reserve forces and National Guard troops are allowed a deduction for travel expenses attending drills or meetings provided you travel more than 100 miles and stay overnight for the training exercise. This deduction includes mileage reimbursement at 55 cents per each mile traveled. Parking toll fees also qualify. You receive this deduction whether or not you itemize your deductions.
So take a minute to examine your activities over the past year and try to identify items that may lower your tax obligation. If you have questions about these topics or have other areas of concern please feel free to call.
