Tax season is upon us and while some early birds have already filed, the majority of us wait until March and dare I say even April 14th! Before you submit your taxes, you’ll want to make sure you don’t overlook certain deductions.
Some deductions are large, like the thousands you spent on childcare, and others are small, like the 49 cents you spent on a stamp. But the bottom line is, why would you want to pay a penny more in taxes than you have to?
You wouldn’t, right? So here are the eight best tax deductions you won’t want to miss this tax year!
1. Small out of pocket costs
You’re not likely to forget the $200 donation check you sent, but small contributions like mileage driven or postage for a mailing on behalf of a non-profit may also count. On the other hand, some charitable expenses you think are deductible actually may not be. For instance, if you attend a fundraising dinner, you can’t deduct the portion of your ticket that paid for the actual dinner.
2. Student loan interest
You may be able claim student loan interest as a deduction. Eligibility and the amount you can deduct depends on your income but at most the deduction is up to $2,500. You may be able to claim a deduction if the loan is in your name, even if somebody else pays the interest (like your parents), unless you’re still claimed as someone’s dependent.
3. Job-hunting expenses
If you’re seeking your first job or searching for a job in the same field, then you may be able to deduct some related expenses. That may include the cost to print resumes, travel expenses to look for a new job, and job placement agency fees.
4. Childcare (& that includes summer camp!)
If you’re paying for childcare while you work or look for work then you may qualify for the Child and Dependent Care Tax Credit. Daycare centers, babysitters, and summer day camps all may count towards the credit.
5. Medical expenses
If your medical expenses exceed 10% of your gross income (7.5% if you or your spouse is 65+), then you may be able to deduct medical expenses, which include a lot more than just doctor visits.
Prescription glasses, contact lenses, dental visits, weight-loss programs (for a specific disease diagnosed by a physician), and even transportation to and from medical appointments could all count toward your deduction.
6. Energy Savings home improvements
Some energy saving home upgrades may be eligible for a tax credit. Eligible upgrades include home insulation, exterior doors, windows, electric heat pumps, central AC systems, and more. There are limits to how much can apply towards the tax credits, so read the fine print.
7. Work from home
If you regularly use part of your home exclusively for business, you may qualify for a home office deduction. It’s typically calculated by the percentage of your home used for business. If you’re an employee who uses a home office, you may qualify if you work from home for the convenience of your employer.
8. Lifetime Learning credit
The Lifetime Learning credit is used on tuition and fee payments made to a post-secondary school. You don’t need to be working toward a degree in order to claim the credit, and required textbooks may also count toward your credit. Be aware, though, that there are income restrictions on who can claim this credit.