Best Possible Tips for Finding More Tax Deductions

in Tax Deductions


Each year as the time comes again to prepare and file an income tax return, many people look and look to find the most deductions to reduce the amount of taxes they owe or to increase the amount of their refund. Here is a compilation of some useful but oftentimes overlooked, tax deduction tips that many people can qualify for.

For the younger taxpayers out there who may have just gotten their first job this year and had to move more than fifty miles to get that job, you can write off the expense of traveling and moving to that new place. That’s right, you can write off the costs of driving your own car and moving your own belongings, to include a set amount per mile driven plus any tolls and parking fees paid on the trip.

Also, for the parents of students going off to college this year, there is the Hope Credit which applies to students in their freshman and sophomore years in college. It provides up to $1800 in tax credits. There is also the newer American Opportunity Credit which provides up to $2500 in tax credits for parents of students who are in years one through four. Basically the same as the Hope Credit, only it is applicable to the first four years of a student’s college education. If student loans are involved and the student’s parents pay back the loan, the IRS sees it as the money being given to the child, who in turn paid back the loan. Any child not claimed as a dependent is eligible to deduct up to $2500 of the interest on student loans that their parents paid.

If you made any energy saving home improvements last year, be sure to list them. You can get up to 30% of the total spent on those home improvements back. These credits apply to many qualifying, energy saving home improvements such as windows and doors, solar lighting panels, heat pumps and many, many other such home improvements. Beautify your home and make it more environmentally friendly and the government will give you back up to 30% of what you spent, not a bad deal.

Child care credits are sometimes overlooked if they are paid through an account at your work known as a reimbursement account. Up to $5000 worth of child care expenses can be paid through the reimbursement account but if you spend more, then you may be eligible to claim credit for up to $1000 more in the form of a credit.

Another often overlooked tax deduction is for any charitable expenses you paid out of pocket. Mostly, you won’t forget to deduct those large, payroll deducted, annual contributions but what about the little contributions? Have you ever given any food like baked goods to the local nonprofit soup kitchen? Or helped out with a local school’s fundraising efforts by buying school supplies? All of those things can be deducted as charitable contributions, no matter how small the amount. It’s good to know that you can make a difference when helping others and be rewarded yourself in the process.

Have a tax question? Ask one of our tax professionals.