There are so many different factors to consider, and you want to ensure that your tax preparer knows. Many people are aware of the deductions that they can make for their small business, but they might not know about the potential deductions they could make on their individual or family tax return by your tax preparer. It’s important to work with a tax professional to find as many legitimate deductions as you can to save you money. Here are some of the deductions you should look into when filing your tax return.

Charitable Contributions

Most people are aware that they can write off their large charitable contributions, and keep records of the checks or payments they have made throughout the year. However, if you make small contributions, or you volunteer your time for a charitable organization and incur some financial costs, you can write these off as well if you keep track of them. This could be something as small as contributing to a charity drive at your child’s school, or buying food to donate to a local drive.

 

Higher Education Tuition and Fees

Although the costs of college are very high, many people will be pleased to note that you can deduct up to $4,000 in tuition or fees on your tax return. This can be used for either yourself or a dependent. This deduction can really help reduce the financial stress that comes from paying tuition and buying textbooks. You can also deduct up to $2,500 in student loan payments over the course of the year. However, in order to deduct these payments, your income must be under $80,000.

 

Investment Management Fees

There are many different deductions you can make while managing your investments, but the one that most people miss out on is investment management deductions. You can deduct things like fees for investment counseling, online investment management services, and some types of custodial fees. Record everything you pay throughout the year that is related to your investments, and then discuss with a professional to see which items can be deducted.

Job Search Expenses

If you have been unemployed and were looking for a job at any point during the year, you may be surprised to find out that you can write off any related expenses during that time. This includes travel and lodging costs for interviews, printing costs for resumes and business cards, and membership fees for employment search organizations. If you get a job where you need to move, you can also deduct some of your moving expenses, like the cost of a moving van and a plane ticket.

Gambling Losses

This is a surprising deduction that many people aren’t aware of. You can actually deduct any gambling losses you have incurred if you are reporting gambling income. You are limited to deducting as much as you made from gambling in that year. This is because gambling winnings are taxable, so although you will be taxed on them, you may make some of it up by reporting your losses.

Tax Preparation Fees

Many people say that they don’t want to have a professional do their taxes because they don’t want to spend the money. However, you can actually deduct your tax preparation fees on your return. This could include fees paid to a professional, or it could just be used to cover your electronic filing fees.

Health Insurance Premiums

If your medical expenses exceed 7.5 percent of your gross adjusted income, you are eligible to deduct any medical insurance premiums you paid throughout the year. If you have a chronic illness or injury, this can save you a huge amount of money in the long run. If you are self-employed and paying for your own health insurance, this can benefit you even more, as you’ll be able to deduct all of your premiums, regardless of your total medical expenses.

Hobby Expenses

You read that right: you can actually deduct regular expenses related to your hobby. To qualify for this, your hobby must not be used to make a profit, and you cannot deduct financial losses with this exemption. A good example of this would be an artist repurchasing their paints once they have run out, or a woodworker buying a specific piece of lumber for a new project. Talk with your tax professional to see if your hobby would qualify for this deduction.

Work Uniforms

If you are required to purchase a work uniform that you would not be able to wear outside of your job, you can deduct this cost on your tax return. This is a good deduction for anyone who works in retail to be aware of, as it is common to have to purchase your uniforms. However, take note that you cannot deduct dress pants, shirts, or jackets, as these could be worn outside the office.

Sales Tax

In many cases, it is a good idea to deduct your state sales taxes on your return to get more money back. If you made a large purchase, such as a car, this will save you a huge amount of money. To find out exactly how much you need to deduct for each state, visit the IRS website and look for the appropriate charts.

Although filing your taxes can be a hassle, if you fill out everything correctly and take advantage of the deductions at your disposal, you will definitely reap the rewards. It is very important to keep track of your expenses throughout the year so you can make deductions appropriately. You should also consult with a tax professional to make sure that everything is reported correctly.

Contact our San Diego Tax Preparers today.