As you start getting your tax information together, don’t forget to look for tax deductions.
While it is mostly too late to rack up new tax deductions, you can go back through your expenses from last year and figure out if you are eligible for another deduction or two. Every little bit helps when it comes to decreasing your tax liability.
If you are looking for a few more deductions to add to your tax return, here are 10 common overlooked tax deductions to consider:
1. Charitable Mileage
Many people are aware that their charitable contributions can be deducted if they itemize their taxes. However, you can also deduct the mileage that you travel in the service of your favorite charity.
When you travel to and from the charity location, or if you are running errands on behalf of the charity, you can deduct 14 cents per mile. You also get to deduct what you pay for parking and tolls. And, if you take public transport, you can deduct those costs as well.
Just make sure you keep good records.
2. Tax Preparation Fees
When someone else prepares your taxes, or even if you prepare them yourself using paid software, you can get a deduction for the cost. Deduct the cost of your accountant, your TurboTax software, and even convenience fees that you might be charged.
It’s worth noting, too, that financial planning fees, and fees paid for financial management, can also be deducted from your income.
3. Educator Expenses
It can be easy to overlook expenses you pay as an educator.
However, you do have that option if you worked at least 900 hours over the course of the year as an educator in a K-12 setting. You can take your deduction in two places: There is a line on Form 1040 for amounts up to $250, and beyond that you can Schedule A to deduct your expenses.
4. Property Losses
If you had a property loss, due to destruction or theft, you can deduct some of what you paid for repairs, and even for the decrease in value to your home.
You do have to follow the rules, though.
No deduction for amounts covered by your insurance company, and you have to have paid more than $100, since the first $100 you pay isn’t tax deductible.
5. Blogger Tax Deductions
Are you a blogger?
Even if you only blog for side hustle purposes, you can still get a tax deduction for some of your expenses. Some blogger tax deductions include online expenses for advertising, hosting and domain registration.
As long as you use them only for your side business, you can also deduct home office supplies. If you have a hobby of other kinds as well, you can deduct some of your expenses.
6. Legal Bills
In some cases, you might be able to deduct legal bills — as long as you paid for services that net you taxable income.
You won’t be able to deduct the expenses paid when you hire a lawyer to represent you in a custody case, but if you hire someone to help you get alimony, and you end up with that new income (which the government can tax), then you can deduct your expenses.
7. CD Withdrawal Penalties
When you withdraw money early from a certificate of deposit, it comes with a penalty. This can cut into your earnings from the CD, as well as offer annoyance. You can recoup some of that cost when you deduct the penalty on your taxes.
So, if you ended up with such a fee, make sure to remember to deduct it.
8. Property Taxes Paid on a Timeshare
In a number of cases, when you have a timeshare, the property taxes you owe are included in the yearly maintenance fee that you pay.
Read through your statement, because if your maintenance fee is broken down on the statement, you might be able to enjoy a tax deduction. Check to see what portion of the fee is going toward property taxes, and deduct that — much as you would your regular property tax payments.
9. Medicare Premiums
Your Medicare Part B and Medicare Part D premiums might be tax deductible as medical expenses. This can be a great help if your premiums have been on the rise.
On top of that, those who aren’t eligible for Social Security, and enroll in Medicare Part A, can deduct those premiums.
10. Breastfeeding Equipment
Here’s another deduction that is sometimes missed: Breastfeeding equipment.
If you buy a breast pump, and other equipment, you can deduct the cost as a medical expense, since the IRS considered it one.
Remember, though, that medical expenses have to exceed 7.5% of your adjusted gross income if you want to deduct them separately. You can increase the deductibility of your medical expenses with the help of a Health Savings Account.
Bottom Line
These are great deductions, but make sure that you are eligible before you take them. Some deductions require that you meet certain qualifications.
When in doubt, check with the IRS web site, or consult a knowledgeable tax professional.
Thanks for the list! I’ll definitely be referring to the blogger expenses when I’m digging up receipts and filling out my return this year.
I refer back to it all the time!
Thanks for the tips, especially the one for bloggers. This is the first year I will be claiming blogging income so if I can get some deductions, I want to know about them.
It’s good to have an idea of what you can deduct so you can plan for the coming year as well.
Breastfeeding equipment, I have never heard of that write-off. Very interesting.
I was never the best at write-offs early on, but now I have a good accountant that helps keep up with everything I should be writing off.
A good accountant can help you interpret tax rules and show you ways to minimize your tax liability.
Thanks Miranda – this list is helpful. I would have overlooked the tax prep write-off – good reminder!
Interesting stuff here. Nice job on this one, I’m guessing not too many people knew about all of these. Charitable mileage and breastfeeding equipment? Never knew these were deductible.
I never heard about property loss deductions before. I suspect that many people don’t know about that. either. Sigh. Just another reason why you can’t fit tax forms on a postcard, and everybody gets stuck paying accountants to wade through needlessly complex tax forms.
I didn’t know you could deduct Tax Preparation Fees! Thanks for sharing this awesome list with us.
Being able to deduct legitimate business expenses is one of the top tips here. Especially, since it can make a huge difference in your tax liability.
Medical expenses are difficult because of the limitation against gross income. Another one would be orthotics. This would potentially be applicable for both men and women. :O)
Always great to get deductions, the more the better. Never seen a tip for deducting breastfeeding equipment before. Very creative!
You left off one vital piece of information. Several of these deductions are only applicable if you spend above x% of your AGI on the respective item. You mention 7.5% for medical expenses, but there is a similar requirement for tax prep fees.
Also, driving to and from the charity does not constitute charitable driving, just as driving to and from the office is not a business expense. If you are transporting supplies or people as part of the service provided by the charity, then it is deductible. For example, delivery meals on wheels or picking up a 10 bags of mulch for habitat for humanity counts. Driving yourself to either org’s HQ does not.
Of course, you can always try it and just hope the IRS doesn’t notice, but that’s a game I’m not willing to play.
Most of these deductions won’t apply to me, but just seeing them listed reminds me that I need to develop a better system for tracking my deductible expenses. I think I’ll keep it simple and go with a trusty, old shoe box.