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Here is a list of tax deductible items (in alphabetial order) that are often overlooked. Granted, it is not all inclusive but it does cover the most common missed opportunities to potentially save yourself some tax dollars. You can obtain more detailed information by visiting the IRS website.
- Accounting and tax preparation fees that you incurred for the prior year tax returns that you paid during the current year.
- Alcoholism and drug abuse treatment programs
- Amortization of premiums your paid when purchasing bonds as an investment. This often results when buying bonds in a secondary market as opposed to when originally issued at par.
- Appraisal fees you may have incurred to substantiate a charitable deduction.
- Appreciation on property you donated to a charitable organization.
- Casualty and theft losses - subject to limitations.
- Cellular phones and charges you incur for work or business related purposes.
- Cleaning and laundering services you incur for any uniforms required by your job.
- Commissions and other closing costs when you sell property - other than your personal residence qualifying for gain exclusion.
- Contraceptives when purchased with a prescription
- Costs incurred when searching for a new job in your current field or occupation.
- Early withdrawal penalties when you cash in a CD prior to maturity.
- Eye glasses, contact lens and hearing aids.
- Depreciation of home computers when used for business or work up to the percentage of such usage.
- Dues deducted from your paycheck, paid to labor unions.
- Education expenses if required by law or your employer to maintain or improve your job skills (net of any reimbursement your employer provides to you)
- Employee contributions paid to a state unemployment or disability fund. Your employer should include this amount on your W-2 form
- Employee moving expenses under certain circumstances where minimum distance requirements are met.
- Gambling losses up to the extent of gambling winnings.
- Health insurance premiums if you are self-employed
- Investment advisory fees subject to itemized deduction limitations.
- Long term care insurance premiums.
- Margin account interest with your broker to purchase investments.
- Medical transportation, a standard mileage deduction and lodging expenses incurred while away from home required for medical care.
- Mortgage prepayment penalties.
- One half of the self-employment tax you pay.
- Points paid on a home mortgage or certain refinancings (but then only amortizable).
- Real estate taxes associated with your residence or second vacation home.
- Special equipment for disabled.
- Subscriptions to professional journals.
- Theft or embezzlement losses.
- Tools you purchase to be used in your trade or business
- Uniforms and other special purpose protective clothing required for you work.
- Worthless stock or securities. This one is easy to overlook if the value just went to zero but there was not an actual sale transaction by the broker. Thus, it will not show up on your year end form 1099-B report and you may forget it.
- Note that in many cases where certain of these expenses are incurred by an employee as opposed to a business owner, there may be limitations to only deducting as a miscellaneous itemized deduction the extent that expense exceeds a certain Adjusted Gross Income threshold. Therefore, unless you have enough expenses to exceed these thresholds, you may not be able to derive any tax benefit.
Note that many of thse deductions are subject to limitations, income level calculations and phase-outs. This is why it is so important to get the help of a qualified tax preparer. The fees you pay for for their expertise might be less than the tax benefit and they can keep you out of trouble with IRS by avoiding mistakes that you might otherwise not even be aware of. As a CPA providing tax services in Allentown I invite you to contact me.
Tax Deductions Overlooked