The
2012 filing season is over, and now is a good time to get your records
organized for 2013. Whatever your thoughts on the tax code, deductions
are available to you, and you might as well take advantage of them.
Reuters recently published an article that reminded taxpayers of 10 easy-to-overlook deductions that you won’t want to miss:
-
Taxes on your new car –
The state sales tax write-off allows taxpayers to choose between
deducting state income taxes or state sales taxes. It won’t make sense
in every case, but if you don’t claim a lot of income (if you’re retired, for example) and make a large
purchases, like a boat or a car, it can save you money. -
Supplies you donate to charitable organizations – Cash
donations to non-profits aren’t the only thing you can deduct. You can
also write off food you bought for a homeless shelter, pens you donated
to an after-school program, and mileage from driving your car for
charity (at a current rate of 14 cents per mile). -
Student loans
– You can write off up to $2,500 a year in student loan interest, even
if you don’t itemize. (There are income limitations,
however.) -
Breast pumps and acupuncture
– The medical cost category is broader than you might think. Breast
pumps and their accessories, eyeglasses, hearing aids, acupuncture
treatments, weight-loss programs, and travel to your doctor’s
appointments are often deductible. A full list is available via the IRS’s Publication 502. (However, you can only deduct the amount of medical expenses that top 7.5 percent of your adjusted gross income.) -
Care of elderly parents
– The costs associated with caring for aging parents is deductible, if
your parent makes less than $3,800 (excluding Social Security), and you
(along with siblings) must pay more than half of his or her bills. -
Job hunting
– Preparing your resume, traveling to interviews, outplacement fees and
other job-hunting necessities are all deductible costs. If you take a
job at least 50 miles away, you can write off the cost of the move as
well. Job-hunting costs are part of the miscellaneous deduction category
(which you can only take once it’s above 2 percent of your adjusted
gross income), but there’s no limit on moving expenses, even if you
don’t itemize. -
Investment advice
– Not only are fees for financial advisors deductible, but so is the
cost of traveling to meet with them Subscriptions for financial
publications can also be deducted. -
Home office –
You may know that you can deduct a home office, but don’t forget
everything associated with it, including high speed internet, books and
conferences you need to keep the business going, your laptop, phone
system, and equipment. -
Housing bubble fallout
– If all or part of your mortgage debt was forgiven as part of the
housing bubble fallout, you don’t have to report that amount as income,
as long as it was for your primary home. You can also deduct private
mortgage insurance, though income limits do apply. -
Retirement accounts
– Depending on your income situation at the end of the year, you may
want to open up a deductible IRA or Roth IRA. You have until April 15 of
the following year to take advantage of this one.
It
makes sense to save money where you can. As you’re planning for 2013
and organizing your records, keep these deductions in mind and save any
paperwork associated with the ones you use.
