Make the most of the deductions available to you
As the tax year winds down and as the holidays gain momentum, it’s easy to put off thinking about serious matters such as taxes. After all, there are holiday parties to attend, office parties to live down, and visits with friends and family foremost on your list. Once the holiday season is over, however, tax season will be here before you know it.
You might think of tax deductions as something only high-income earners need to worry about, but there are plenty of deductions available for taxpayers of all income brackets. Here’s a look at some of most easily overlooked deductions:
1. Casualty or theft losses: If you lost property in a disaster or via burglary or theft, note it on your tax return. Let’s say you use your car to drive for Uber or Lyft. Your car is totaled in an accident, including some of the contents. You’ll need to claim this deduction on the Schedule A attachment on your federal tax return. The rules surrounding this deduction are complex, so it will be in your best interest to seek the advice of a tax pro.
2. Cell phone: You can claim this deduction only if you use your cell phone for business purposes. Keep copies of your cell phone bill, and note which calls/text charges are business-related. You’ll need these figures at tax time when calculating your deduction.
3. Contacts, glasses, or hearing aids: Your new contacts and back-up glasses may have cost you a fortune, but you can deduct most of the cost at the end of the year by using the Schedule A attachment on your tax return.
4. Fees for prepared childbirth classes if part of pre-natal care: Kids are expensive, even before they arrive. Claim this cost under medical/dental and keep a copy of any documentation verifying medical necessity or completion of the course. You can only deduct any medical/dental costs not covered by insurance, so this won’t work if your insurance company covered the cost of your childbirth classes.
5. Union dues: You can claim your union dues as a deduction, but be sure to keep any documentation that verifies you paid them or they were deducted from your paycheck.
Tommrow: 5 more of the most easily overlooked tax deductions