If you do your own taxes, I hope you seek out every legitimate tax deduction. After all, why should the government be allowed to keep even more money than it is already taking away from hard-working Americans trying to make ends meet? There are plenty of tax deductions out there, including ones we don’t always think about unless they are brought to our attention. Here are 5 of them:
• Charitable Contributions. If your gifts are made to a qualifying charitable organization, they are tax deductible. Most non-profit organizations and churches are included in this group. To qualify, the group must be a 501 (c) (3) organization. If it’s a non-cash donation, such as food or clothing, it must be deducted at fair market value. If you claim the value of non-cash donations as more than $500, you must fill out and submit Form 8283.
• Job Search Expenses. If the government is telling you the unemployment rate is low but you can’t find a job, make them pay for their wrong information. Some of the costs you incurred looking for a job can be claimed on your taxes, assuming the search was within your occupation and there was no significant break between your last job and your current search. Your job search expenses must be 2 percent or more of your adjusted gross income.
• Personal Property Taxes. You’re probably already including home property taxes on your form, but you might also be able to claim personal property taxes on a car or boat. The taxes you incurred must be imposed on an annual basis and must be based only on the value of the asset.
• Retirement Plan Contributions. Contributions to Roth IRAs are not deductible, but those made to traditional IRAs and SEPs (Simplified Employee Pension) might be. There are contribution limits each year (for example, $5,500 to an IRA or $6,500 if you’re 50 or older for tax year 2014), but this is definitely worth checking out.
• Mortgage Interest and Points. You are allowed to deduct both annual mortgage interest on your home and any points you paid toward a home purchase during the tax year. For more details on this, see IRS Publication 936, titled “Home Mortgage Interest Deduction.”
Are there other tax deductions you have taken you’d like to share? Our readers would much appreciate it.