As you prepare your income tax return paperwork this year, it’s important to make sure you’re applying all of the deductions and write-offs you can to maximize your savings.
Here are a few of the tax deductions you should not overlook, as they will give you a chance for some big savings. Talk to your tax service in Des Moines, IA if you’re unsure whether these apply to you.
You are allowed to deduct sales taxes or state income taxes when filling out your federal tax return. If you live in a state that does not have income tax, this can save you quite a bit of money, but even if you have already paid your state income taxes, you might get a better deal if you made a big purchase that year, such as a vehicle or expensive piece of jewelry. You will need to itemize to take the deduction.
Health insurance premiums are tax deductible, in some cases. Your medical expenses must exceed 7.5 percent of your adjusted gross income for them to classify as deductions for tax years 2017 and 2018. If you are self-employed and have to pay for your own health insurance coverage, there’s a chance you can deduct the entire cost of your premium, which would get removed from your adjusted gross income rather than being added to the list of itemized deductions.
Classroom tax breaks for teachers
Most teachers end up paying out of pocket for quite a few classroom expenses. The IRS is sympathetic to this, and allows K-12 teachers to deduct up to $250 for classroom materials. This gets subtracted from your adjusted gross income, meaning it’s a deduction you can use even if you do not itemize.
Most taxpayers know their charitable contributions are tax deductible, but this goes beyond writing a check to a nonprofit organization. For example, if you bake brownies for a bake sale fundraiser for a charity, you can deduct the cost of the ingredients used.
Education and training
There are a variety of different deductions specifically geared toward college students, but many people don’t realize other types of education and training also come with some tax breaks that you might find highly beneficial. For example, the Lifetime Learning credit provides up to $2,000 per year for spending on education after high school, which includes certifications, job training and more.
Job seeking expenses
Did you spend a fair amount of time looking for work in 2017? The cost of finding a new job can be high, but fortunately, there are some deductions. If job seeking expenses exceeded two percent of your adjusted gross income, those expenses over the threshold can be deducted. This includes costs of printing resumes, traveling to interviews and purchasing a new suit for those interviews.
These are just a few of the most common examples of deductions you should carefully consider for this tax season. You might find you’re able to save more money by itemizing than by taking the standard deduction. Contact our tax service in Des Moines, IA today for more information.