Often forgotten tax breaks for Americans
With the U.S. tax season rolling around, most Americans are looking for ways to reduce their income taxes and either pay less or at least get more back from the IRS. What you may not know, though, is that there are many tax breaks that Americans do not take simply because they do not know about them. It is always wise to work closely with a tax professional to ensure you actually qualify for these tax breaks. If you do, there’s no reason to not take full advantage of them. Consider the following most-forgotten tax breaks you may qualify for.
American Opportunity Tax Credit
Once called the Hope Credit, the American Opportunity Tax Credit provides a tax credit for two years of undergraduate tuition. You can qualify for the full credit if your modified adjusted gross income is $80,000, or $160,000 or less for a married couple that is filing jointly. The Lifetime Learning Credit, another college tax credit, provides credit as well, but the American Opportunity Tax Credit tends to offer a higher income limit.
Job Hunting Costs Credit
If you are one of the millions of people who are unemployed and looking for work outside of your current area, you may qualify for a Job Hunting Cost credit. You’ll qualify if you are looking for a job in the same type of work you are in now. If you qualify, you can deduct the job hunting costs, including transportation expenses, food and lodging expenses, employment agency fees, printing fees, and cab fares. Keep in mind this does not apply to those looking for first-time jobs.
Don’t Forget Those Donations
This is one of the most overlooked tax breaks available. If you made a large charitable donation for the year, it is easy to remember and plug it in to your taxes. However, you likely don’t think about those smaller, out-of-pocket donations that can also meet your needs of lowering your tax requirements. Any total more than $250 requires a receipt, though. If you donated food to a non-profit organization regularly or even helped deliver food, the gas mileage could be a deduction that you qualify to take.
Self-Employed Medicare Premium Deductions
If you are running your own business and you qualify for Medicare, you can deduct the premiums you pay for Part B or Part D in some instances. You cannot take this deduction if you qualify for any other type of employer health plan, though. It could help to save some money on your taxes if you do qualify.
At deVere Group we believe that the goal when filing your taxes is to pay what you are legally required to pay, but that there’s no reason to pay over and above the legal requirement. Unfortunately, many Americans leave money on the table and have no idea that they actually are paying too much in income tax each year. Working with a well-qualified tax professional can help you to reduce some of these risks, but it is ultimately up to you to stay in the know.