When it comes to filing taxes you may be cheating yourself. Every year money is left on the table by unknowing taxpayers who miss some great chances for federal income tax deductions. On occasion the IRS has fixed taxpayer mistakes to benefit the taxpayer but that isn’t a guarantee. As a reminder here are some potential tax breaks that often go unnoticed.
- Job Search Expenses. If you found a new job in the same line of work in 2012 and you itemize you can deduct the job-hunting costs as a miscellaneous itemized deduction. Even if you didn’t get the new job in 2012 you can still write off qualified job search expenses such as overnight lodging mileage cab fares resume printing headhunting fees and more. Even if you didn’t keep track of these fees your Louisville tax CPA can help you estimate them.
- Home Office Expenses. If you work from home figure out what percentage of the square footage of your home is used for work-related activities. Bathrooms and other break areas count in this calculation. If you use 15% of your home’s square footage for business then 15% of your homeowners insurance home maintenance costs utility bills ISP bills property tax and mortgage/rent may be deducted.
- Health Insurance Costs. According to the Small Business Jobs Act of 2010 about 7% of us pay post tax health coverage costs out of pocket. If you are in that 7% you may write off 100% of your premiums as an adjustment to your business income. That write-off privilege extends to you your spouse and 100% of your dependents as well.
- Student Loan Parent Paid Interest. If you made a student loan payment in 2012 on behalf of your son or daughter in 2012 and you can’t claim that child as a dependent that child may be able to write off up to $2500 of student-loan interest. Itemization isn’t even necessary.
- Education and Training Expenses. If you took any classes related to your career in 2012 that added value to your business or increased your potential you can deduct the tuition paid along with the textbook fee and travel costs. Certain periodical subscriptions may also qualify for such deductions.
- Eating Out. The cost of a business breakfast lunch or dinner associated with business development qualifies for a miscellaneous itemized deduction.
- Charity. In the course of charitable work like volunteering at a toy drive working at a soup kitchen or relief effort some expenses can be itemized including the mileage ($.14 per mile) accumulated and any expenses incurred while doing the work. These expenses are fully deductible. Remember that tolls and parking fees also qualify.
These are just a few deductions that taxpayers may be unaware of. Check with your Louisville CPA to receive the full slate of deductions that might be available to you.