Tax laws are often very complicated and so missing a tax deduction is not unheard of. In fact a lot of people do in fact miss out on a few deductions either because they’re not aware of the law or because they forget about it while filing their papers. Listed below are 4 deductions you would do well to keep in mind.
· Donations (non cash)
If you happen to have donated some of our belongings to charity or any other sort of organization, you can get the total value of the donated items deducted from your tax amount. Of course, you would need to furnish written receipts for all the items. This can be quite a task, but the money saved is worth the effort.
· Refinancing
Interest rates have been really low over the past few years, which has led to a lot of houses being refinanced. If you’ve refinanced, chances are that you’ve paid points to get a lower interest rate. Not only are these points deductible over the life of your new loan, but also, any unamortisized points can be deducted in the year of the new loan.
· Investment and Tax Expense
A lot of expenses incurred by you for in the tax-planning domain can be deducted from your tax amount. This includes a variety of tax related services. Keep in mind though, that it is subject to the 2% Adjusted Gross Income limitation. Some of the expenses that can be deducted are tax preparation fees, investment advisor’s fee, fees paid for the use of a safe deposit box, legal and accounting fees, directly paid broker and IRA fees and investment publications. Many people don’t bother with these deductibles because they feel as though they won’t have enough to exceed the 2% AGI floor. Don’t think in this way though, since a lot of people actually find that they do make the 2% floor and more. So give it a shot, you may save a lot of money in the process.
· 529 College Savings Plan
The contributions you make towards your 529 College Savings Plan can go towards your deductibles. This is not the case with all states though. Also, this deduction is not applicable in the case of federal returns. This is why a lot of people fail to take notice of this avenue of tax deduction.
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