It’s Tax Season, getting a jumpstart on your taxes and filing before the deadline is always a great feeling. While working on this year’s taxes, make sure you don’t miss or forget these common deductions.
Out of Pocket Charity
Don’t forget to add up the little contributions you give to charity. Not only monetary donations are considered a donation. Ingredients for a meal prepared for a nonprofit count as contributions too. If your contributions add up to more than $250, make sure you have proof from that charity or charities of the support you provided. If contributions are under $250, be sure to keep your own records for proof.
Student Loan Interest Paid by Parents
If your mom and dad pay off or help to pay off their child’s student loans, the IRS treats this as money that has been given to their child/student. Just as long as that child isn’t claimed as a dependent, that deduction is all theirs.
New Job Moving Expenses
To qualify for a new job moving expense, you must move within 1 year of starting a new job and work or plan to work 39 weeks of the first 12 months of the new job. Additionally, your new workplace must be at least 50 miles farther from your previous home than your previous job location was from your previous home. This is to ensure if someone were to commute from Washington, IA to Cedar Rapids, IA, but then moved to Iowa City, IA they wouldn’t get the deduction because they were commuting further and the point of the move wasn’t based on a job. If all these are true, you can deduct the cost of moving to your new home. Also, did you drive your own car during your 2016 move? You can deduct 19 cents/mile plus anything you may have paid for parking and/or tolls. For a more in-depth explanation of this deduction visit IRS Publication 521.
State Tax Paid Last Spring
When you filed last year’s taxes, did you owe on your state income tax returns? If so, remember to include that number in your state-tax deduction on this year’s federal return.
College Credit for Higher Education
The Lifetime Learning credit is worth up to $2,000 per year used on post-high-school courses that improve or add new job skills to your current skillset. The up-to-$2,000/year-number comes from a calculation of 20% of up to $10,000 that is spent on additional education courses.
If you have any questions about the above named deductions or need assistance filing your taxes, please reach out and consult with a Tax Professional.