Every year, the wonderfully complex world of taxation manages to get a whole lot more complex than it once was. It means that as the years go by we can find ourselves claiming for breaks that we shouldn’t have, or missing out on the kind of breaks that we should have. 2018 is no different and this year you might be missing out on some pretty awesome tax deductions.
Let’s take a look at some of the goodies that you might be missing out on if you aren’t looking closely enough at the particular rules that apply to your taxes:
- Medical and Dental Expenses. The most common one that people miss out on. You can get nice savings on your expenses for treatment if the overall costs exceed more than 10% of your homes income. If you are 65+ then take 7.5% of your AGI and use that as the calculator instead. If it goes above this, you can usually get some awesome deductions.
- Home Renovations. Doing up your home is a great thing to do to increase the value, but the taxes that you get hit with afterward? Not so much. If you need to make improvements to your home on health grounds, though, you can deduct the renovation as a medical expensive like the above. If they improve the value of your home as well, though, this does not work.
- Hobby Expenses. A cool deduction that exists but nobody tends to use is that of hobby deductions. Hobbies are endeavors that you do not make money on. If you suffer any kind of financial loss due to a hobby you can deduct that loss from your income and make a nice little saving while doing so.
- Job Searching. One very underused deduction is job search deductions. If you are out of work, then you can deduct expenses that you bought to try and get a job so long as it falls in the same category as your most recent job. You can’t be a plumber and then try buying all the equipment to become a software engineer and try put that on your form – that won’t fly, sorry! This does include things such as travel ($0.54 per mile) as well as parking, tolls, preparation, mailing and even paying for job-related search fees.
- State Balances. If you owed any form of additional tax on prior years due to ta state return and you paid them p, you might be able to deduct the taxes that you just paid from the year to come. Not always possible, but definitely worth pushing your luck with if you want to make a nice little escape from the costs that you already laid out.
- Volunteering is a good way to get your taxes down. You can deduct charity expenses that were used to get you around the place and also to make sure that you are reimbursed for buying uniforms for the location that you volunteer, or even parking if it’s a requirement of the role. Either way, it’s pretty easy to begin to build a believable catalogue of reasons why you should be let off with having to go the full hog.
Many more deductions exist, but this should show you just how easy it is to make some pretty smart changes to how much tax you are paying each day.