Don’t Overlook Last-Minute Deductions

paperwork-1538658-1279x852(1)Wrap the year up right by getting a jump on tax day planning

Part 4 of 4

By now, you’ve become familiar with some tax breaks that you hadn’t thought of before. In part 4 of this series, we’ll take a look at even more tax breaks. 

As with any tax matter, it’s best to check with a licensed tax professional with any questions regarding your eligibility for a specific tax deduction. 

1. Accounting and tax prep fees: If you paid for tax prep software or paid a tax pro to prepare and file your taxes, you can deduct any fees associated with that service. 

You may also deduct any fees associated with representation during an IRS audit or for any other tax-related matter. 

You would list these fees under “miscellaneous deductions” on  the Schedule A attachment for your federal tax return. 

2. Substance abuse treatment: These costs can be deducted under the “medical and dental expense” portion of schedule A. 

3. Legal fees connected to alimony: While you can’t deduct all of the legal fees associated with divorce, you can deduct the portion of legal fees that were associated with either receiving or paying alimony. 

4.  Mortgage prepayment penalties and late fees: If you paid off your mortgage early and were hit with a prepayment penalty, you can deduct that penalty under the “mortgage interest” portion of Schedule A. 

If you made any late mortgage payments, you can also deduct your late payment penalties under “mortgage interest. 

5. Personal liability insurance: If you must carry personal liability insurance as part of your employment or business, you can deduct any premium costs that are not reimbursed by your employer. 

As with any tax matter, it’s best to check with a licensed tax pro regarding your unique tax scenario. You’ll need to meet certain income percentage guidelines to claim most of the deductions mentioned in this series. 

Getting an early start to end of year tax planning will save you time and headaches in the long run.

If you will be claiming any itemized deductions for the tax year, be sure to keep any receipts or records connected with your deduction(s).

You’ll need them to prepare your tax return and you’ll  also need to keep them beyond tax day in the event your return is selected for an audit. 

 

 

 

 

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