What Tax Deductions Do Most People Overlook?
When it comes to tax returns, what tax deductions do most people overlook? Most people that receive a really good tax return normally make sure that they include every possible tax deduction they qualify for. When filing tax deductions with your tax returns you need to remember that the key to a nice tax return is reducing your taxable income. The problem that lies with people not getting a good tax return is their lack of knowledge for current deductions, which guarantees them opportunities to save money. If you are going to maximize your tax returns, you first need to focus on the most commonly used deductions by tax payers.
Common Tax Deductions Overlooked
Some of the most common tax deductions that most people overlook are medical, expenses, state sales tax and college tuition. If you have medical expenses that total 7.5% of your gross income, you can qualify for the medical expense deduction. This is very exceptional if you had just had some type of surgery or some medical procedure. Also, the government will allow you to deduct the total amount of income tax you paid the previous year. For those that live in an area that doesn’t require a state or local tax, you can deduct you total sales taxes paid. And if you or your child is enrolled in college, you can deduct up to $4000 of what you had contributed to the college or university under the Hope or Lifetime Learning Credit. As for these deductions, you or someone you know should fit into either one, if not all of these deductions.
Other tax deductions that are very common are that most people overlook are small charitable contributions, jury payments forfeited to an employer, and cost of income tax preparation. A lot of people make large charitable donations each year, but what about the ones made to organizations soliciting outside your local Walmart or Winn Dixie. These small donations can be used as tax deductions too and should be accounted for. If there is a chance that you serve jury duty and your employer require you to forfeit your jury payments to receive employee full salary, then you can file this as a deduction. Then for your time spent with a tax preparer, if you decide to hire one, you can file a deduction for the amount you paid to the tax preparer. You can also deduct the cost of software if you did your own taxes. Therefore, there are tons of tax deductions; you just have to do a little homework to see which deductions you qualify for.