Last-Minute Deductions You May Have Forgotten About

Freeimages/Paige Foster
Freeimages/Paige Foster

The 2015 calendar year is winding down, which means your tax year is also coming to a close. If you’re scrambling to think of last-minute credits or deductions, here are a few to jump-start that process:

Student loan deduction: If this is your first post-college tax year, chances are you’ve started making payments on your student loans. The good news is that you can deduct the interest on those payments at the end of the year. Even better: you can still deduct the interest even if your parents are making the payments on your behalf. As long as you’re not being claimed as a dependent on you parents’ return, you can claim up to $2500.00 of student loan interest without attaching Schedule A, Itemized Deductions to your return.

Your student loan servicer will issue a 1098-E, or the Student Loan Interest Statement. If you have multiple loans, make sure each servicer sends you the 1098-E. They typically send them out no later than the end of January, so you should be good to go by February.

By deducting student loan interest, you could end up paying less in taxes in the long run since your taxable income will be less.

Job search expenses: If you landed a new job within the same industry, your moving expenses may be deductible. Here’s an example of some of those costs:

  • Phone calls
  • Postage for snail mail
  • Career placement services
  • Resume printing and copying
  • Lodging and travel expenses associated with out of town interviews
  • Relocation expenses related to your new job, provided your new residence is at least 50 miles from your current residence

There is a catch, however. These expenses must exceed 2 percent of your Gross Adjusted Income (AGI) in order for you to take the deduction. If you can claim the deduction, you can itemize these expenses under the “miscellaneous expenses” portion of the Schedule A attachment on your tax return.

Medical/Dental: If you had a lot of out-of-pocket medical/dental expenses this year, now is the time to deduct them. Same goes for any HSA contributions you made this year.

These are just a few of the last-minute deductions you can grab at the end of the year while preparing for tax season. Be sure to organize all records and receipts associated with these expenses, so you’ll be able to file an accurate return, or so your tax preparer can file an accurate return on your behalf.

As with any tax deduction, check with your tax preparer to see if you are eligible, as each person’s tax scenario is unique.

 

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