Often Overlooked Tax Deductions

Are you aware of all of the tax deductions you could claim on your return? Many people are not as aware as they would like to be. It is deductions that you make on your tax return that can help to keep more money in your pocket, wallet and bank account as opposed to being handed over to the government to use for its purposes. While most tax payers are aware of the most common deductions such as those for charitable donations and those for property taxes there may be others that you may have completely overlooked or are in the dark about.

Are you aware of all of the tax deductions you could claim on your return? Many people are not as aware as they would like to be. It is deductions that you make on your tax return that can help to keep more money in your pocket, wallet and bank account as opposed to being handed over to the government to use for its purposes. While most tax payers are aware of the most common deductions such as those for charitable donations and those for property taxes there may be others that you may have completely overlooked or are in the dark about.

Being a homeowner can provide you with the opportunity for tax deductions on an annual basis. There is everything from points that are paid when you purchase the house to property taxes for the time you reside in the house as well as deductions for the interest you pay on your mortgage.

What many people do not realize is that selling their home also brings tax deductions with it. For instance you are allowed to deduct the fees you were required to pay in order to sell. You can also deduct the commission that you paid to the real estate agent you worked with. By so doing this reduces the sales price which in turn reduces the capital gains tax you pay, not to mention the fees you paid when you closed the deal.

When you purchase a motor vehicle you are required to pay sales tax on it. Some states tax you every year after that simply because you are driving your automobile on public highways. If you live in a state that calculates a percentage of the tax on your vehicle based on how much the car is valued at then you can deduct that percentage as being a portion of your personal property taxes.

You already know that making charitable donations such as writing a check for a worthy cause or donating clothing to the Salvation Army can reduce the amount of taxes you pay. What you may not know is that you can sweeten this even more by remembering to figure in any associated fees that went hand in hand with the donation. An example of this would be appraisal fees for any big ticket items you donated such as furniture. 

There is more than one way to be charitable. If you volunteer your time to a worthy cause or an organization that is doing good work  then the money you spend to travel back and forth to help out can be included into miscellaneous deductions on your income tax return. It does not matter whether you drive your own car; take the bus or the subway. Make sure that you keep records of the charitable activities you are involved in. As well keep a mileage log for your vehicle and/or receipts for the public transportation you use. Also make sure that you hold onto your receipts for parking and for any tolls you are required to pay.

Travelling for business means tax deductions for air fare and hotel stays. But did you know that it can also apply to other smaller things such as taking your business clothes to the dry cleaners? That’s right. You have to look your sharpest for your business meetings and seminars when you are out of town. Hold onto your receipts for your dry cleaning bills. If the total on an annual basis goes over the two percent limit for miscellaneous deductions then you can claim it and save!