Posted By Wade Michels

9 Deductions and Credits Even the Pros Miss

Before you sign and submit your return make sure you've got these covered.
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Even if you hire a tax professional, there are a bunch of deductions and credits that even CPAs skip over. And that’s a shame, because Uncle Sam loves it when taxpayers forget about these little beauties. So before you sign, seal, and submit your return, make sure you cover all your bases because failing to do so could cost you big.

Home Loan Points

Did you buy a new home and have to pay points on your new mortgage? If so speak up, because those puppies are tax deductible. A point equals 1% of the purchase price of a home, so if you had to pay 1.5 points to the lender on a $300K pad you paid $4500. But all is not lost; Uncle Sam says you can deduct that $4500 from your adjusted gross income. Ka-Ching!

Student loan interest

Are you making payments on your student loans? I know I've been paying my student loans for years and fortunately, the interest is deductible. In fact, institutions like Sallie Mae do a pretty good job of getting your 1098E (deductible interest letter) out to you well before your taxes are due.

Moving expenses to start a new job

Did you start a new job? Keep in mind you won’t be able deduct the expenses you incurred while looking, but you sure can deduct the amount you spent on the move. Even if you don’t itemize and you’ve relocated be sure to keep track of expenses like movers, trucks, and boxes because these things can add up pretty quickly.

Retirement Savings Contribution

Did you contribute to a retirement account while you were making less than $25K as a single filer or $50K filing jointly? If so you’ll have earned a tax credit of 50% up to the first $2K you’ve put into that account. And yes I said credit, which reduces your tax liability. This is a nice incentive for those with the foresight to think about their retirement.

Education

Have you taken some classes recently? Even if the courses don’t pertain to your present career, you can deduct up to $4000 for said education. You don’t even need to itemize, you’ll probably qualify as long as your adjusted gross income is less than $65K as a single filer or $130K filing jointly. So hit the books and learn about whatever interests you, the deductions and credits are courtesy of your rich Uncle Sam.

Non-Cash Charitable Gifts

Do you have a bunch of old stuff cluttering up your home, basement, or garage? Instead of having a yard sale, consider giving it to charity to earn a suave tax deduction. Just be sure that whomever you donate too gives you an itemized receipt. And if you’re giving away something worth more than $500, get an appraiser to vouch for the value. That’s because the IRS looks long and hard at sizable charitable gifts and you want to have some proof backing up the monetary amount of your good deed.

Health Insurance Premiums

Did you pay health insurance premiums and/or long term care premiums?  Health care is pricey these days, and if these bills add up to more than 7.5% of your adjusted gross income, you can deduct them. So get the calculator out, do some number crunching and if you qualify, deduct these buggers.

Child Care Credits

Do you have kids? Do you work? Do you have to pay someone to watch your kids while you work? Think of it this way, if you pay $300 per week for daycare that works out to be $15,600 per year, which qualifies as a super sweet tax credit. As long as these expenses add up to at least $6000 per year, you’ll be able to use them to reduce your tax bill.

Investment and Tax Expenses

Did you subscribe to an investment newsletter, pay for investment advice, or shell out cash for brokerage fees? If you did and those chunks add up to be more than 2% of your AGI then you get to deduct all the wonderful and not so wonderful guidance you’ve received. Don’t forget that tax preparation fees count as well. So if you’ve paid for a CPA, his services are also deductible.

Fin

It was a long hard year, you’ve had to spend a lot of money, and you’re entitled to your deductions and credits. So take your time, do your homework, and add up those expenses. Even if only a few apply to you, these deductions and credits will go a long way to paying for that next great vacation or a dreamy 60 inch TV.

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