MONEY Taxes

50 Tax Deductions You Didn’t Know About

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From home renovation deductions to hobby expenses.

Tax deductions reduce your taxable income by accounting for expenses you’ve incurred. The IRS offers many ways to reduce your taxable income, from deducting childcare costs and mortgage interest to charitable donations and moving expenses.

Learn about new tax breaks for 2016 and which deductions are returning this tax season.

Related: Don’t Forget These 8 Important Deductions

1. Standard Deduction

Even if you don’t have a lot of itemized deductions to file, you still qualify for a standard deduction for 2015, which is based off of your income. Below is a list of standard deductions based off income and how you plan to file:

Standard Deduction for Individual Taxpayers
Your Income Your Tax Due
$0 — $9,225 10% of your taxable income
$9,226 — $37,450 $922.50 + 15% of the amount over $9,225
$37,451 — $90,750 $5,156.25 + 25% of the amount over $37,450
$90,751 — 189,300 $18,481.25 + 28% of the amount over $90,750
$189,301 — $411,500 $46,075.25 + 33% of the amount over $189,300
$411,501 — $413,200 $119,401.25 + 35% of the amount over $411,500
$413,201 and more $119,996.25 + 39.6% of the amount over $413,200
Data from Forbes.com.

 

Married Filing Joint Return or Surviving Spouse
Your Income Your Tax Due
$0 — $18,450 10% of your taxable income
$18,451 — $74,900 $1,845 + 15% of the amount over $18,450
$74,901 — $151,200 $10,312.50 + 25% of the amount over $74,900
$151,201 — $230,450 $29,387.50 + 28% of the amount over $151,200
$230,451 — $411,500 $51,577.50 + 33% of the amount over $230,450
$411,501 — $464,850 $111,324 + 35% of the amount over $411,500
$464,850 and more $129,996.50 + 39.6% of the amount over $464,850
Data from Forbes.com.

 

Head of Household
Your Income Your Tax Due
$0 — $18,450 10% of your taxable income
$13,151 — $50,200 $1,315 + 15% of the amount over $13,150
$50,201 — $129,600 $6,872.50 + 25% of the amount over $50,200
$129,601 — $209,850 $26,772.50 + 28% of the amount over $129,600
$209,851 — $411,500 $49,192.50 + 33% of the amount over $209,850
$411,501 — $439,000 $115,737 + 35% of the amount over $411,500
$439,001 and more $125,362 + 39.6% of the amount over $439,000
Data from Forbes.com.

 

Married But Filing Separately
Your Income Your Tax Due
$0 — $18,450 10% of your taxable income
$9,226 — $37,450 $922.50 + 15% of the amount over $9,225
$37,451 — $75,600 $5,156.25 + 25% of the amount over $37,450
$75,601 — $115,225 $14,693.75 + 28% of the amount over $75,600
$115,226 — $205,750 $25,788.75 + 33% of the amount over $115,225
$205,751 — $232,425 $55,662 + 35% of the amount over $205,750
$232,426 and more $64,998.25 + 39.6% of the amount over $232,425
Data from Forbes.com.

 

Trusts and Estates
Your Income Your Tax Due
$0 — $2,500 15% of taxable income
$2,501 — $5,900 $375 + 25% of the amount over $2,500
$5,901 — $9,050 $1,225 + 28% of the amount over $5,900
$9,051 — $12,300 $2,107 + 33% of the amount over $9,050
$12,301 and more $3,179.50 + 39.6% of the amount over $12,300
Data from Forbes.com.

Related: How to Know If You Can Really Write Off That Charitable Donation

2. Mortgage Insurance Premiums Deduction

If you obtained your mortgage insurance policy in 2007 or later, you might qualify for a deduction on the amount you’ve paid toward your mortgage insurance premium. However, as of mid-December, lawmakers haven’t extended the expiration date on this provision, according to The Motley Fool. If this measure isn’t extended, you won’t be able to deduct the amount you’ve put toward your mortgage insurance premium.

3. Tuition and Fees Deduction

Regardless of whether you take the standard deduction or itemize, you can deduct up to $4,000 in qualifying tuition and fees paid for yourself, your spouse or a dependent in 2015. The expenses must be for higher education. If you are married but filing separately or if another person can claim an exemption for you as a dependent, then you don’t qualify for the tuition and fees deduction.

Learn: The Most Expensive States for Paying Taxes

4. State and Local Sales Tax

You have the option of deducting either your state and local income taxes or state and local general sales taxes paid. If you live in a non-income taxing state, deduct state and local sales taxes paid.

5. Cash Donations

If you itemize deductions, you can deduct cash donations to IRS-approved charities. You must have written record of your donation in order to deduct cash gifts, no matter the amount. A qualifying written record can be a copy of the bank record, a statement from the organization or a payroll deduction record.

6. Non-Cash Donations

If you itemize, you can claim the fair market value (FMV) of donated clothing, household items and stock. Fair market value is the price you otherwise could have sold the items at. If you plan to donate your car, make sure you are donating to a qualified charity, such as a 501(c)(3).

7. Donating Your Time and Talents

You can deduct certain expenses for charity work. For instance, you can deduct the cost of gas and oil if you use your car to get to and from the place you volunteer. If you don’t want to calculate the value per mile you can deduct, a standard mileage rate of 14 cents per mile is acceptable.

You can also deduct the cost of purchasing and maintaining uniforms you wear to hospitals where you volunteer.

8. Student Loan Interest Deduction

Even if you don’t itemize your deductions, you can deduct up to $2,500 in qualified student loan interest paid in 2015. You do not qualify for this deduction if your gross-adjusted income is more than $80,000, or $160,000 for married couples filing jointly.

9. Job Search Expenses

If you itemize, you can deduct expenses incurred while searching for a job in the same line of work as your current or most recent job. Expenses you can deduct include:

  • Transportation, which includes a deduction of 56 cents per mile, parking, tolls and cab fees
  • Preparing, printing and mailing out your resume
  • Phone expenses
  • Ad placement
  • Fees related to job searches
  • Employment agency fees

10. Moving Expenses

If you meet the IRS distance and time tests and moved for a new job, you can qualify for a moving expense deduction. Qualified expenses include the cost of moving your belongings and travel to your new home. The standard mileage rate is 23 cents per mile. You can also deduct the cost of lodging for yourself and household members.

11. Military Reservist Travel Expenses

If you travel more than 100 miles from home for service, you can subtract travel expenses from the income you report on your tax return. Qualifying expenses include transportation, meals and lodging.

12. Medical and Dental Expenses

You can deduct medical and dental expenses for you, your spouse and your dependents after your total medical expenses exceed 10 percent of your adjusted gross income (AGI). If you or your spouse is age 65 or older, you can deduct total medical expenses that exceed 7.5 percent of your AGI.

13. Tax Preparation Fees

Whether you did your own taxes or paid someone to do them, you can include the fees on your miscellaneous tax deductions list. Costs can include tax return preparation and electronic filing fees.

14. Mortgage Interest Deduction

If you itemize, you can deduct the interest paid on your mortgage. As part of the deduction, you can deduct interest paid on loans totaling $1 million or less. If you’re married and file separately, you can only deduct on loans totaling up to $500,000.

15. Mortgage Points

If you itemize, you can immediately deduct the points you paid to purchase or build your primary home.

16. Home Renovation Deduction

Most often, home renovation costs are not deductible on your tax return. However, if you make improvements to your home for medical purposes, such as adding entrance and exit wheelchair ramps and lowering cabinets for accessibility purposes, you can deduct these renovations as medical expenses. If these renovations increase the value of your home, however, they cannot be claimed as medical-related expenses, according to TurboTax.

17. State, Local and Foreign Taxes

Certain taxes imposed on you can be claimed as an itemized deduction on your tax return. Including state and local sales tax, you can also deduct:

  • State and local personal property taxes
  • State, local and foreign real estate taxes
  • State, local and foreign income taxes

18. Business Use of Your Home

You can deduct certain expenses for using a part of your home for business. To qualify for this deduction, you must use part of your home for one of the following:

  • As the primary location for trade or business
  • As the primary location for meeting and tending patients or clients
  • As a storage facility for inventory or product samples for your business or trade
  • If you have a separate, unattached structure on your property, it must be used exclusively for your business or trade
  • For rental use
  • As a daycare facility

19. Business Use of Your Car

If you use your car for your job or business, you might be able to deduct the costs incurred for business use. You can either use a standard mileage rate of 54 cents per mile or the actual expense method.

20. Business Travel Expenses

You might be able to deduct certain unreimbursed business expenses incurred while traveling for work. Costs could include transportation, baggage fees, meals, lodging and laundry. Any expenses that are considered extravagant or lavish do not qualify for the business travel expenses deduction.

21. Educational Expenses

Under the American Opportunity Tax Credit, which was extended through December 2017, you can deduct up to $2,500 per student. With this tax credit you can deduct college-related expenses, such as the cost of course materials.

22. Employee Business Expenses

If you itemize, some local transportation costs are deductible, as well as certain business entertainment and gift expenses. Keep record of your expenses as proof for when you deduct.

23. Appraisal Fees

If you donated property in 2015, you can include appraisal fees you paid on your miscellaneous tax deductible items.

24. Fees to Collect Interest and Dividends

Fees paid to a broker, bank, trustee or similar agent to collect taxable bond interest or dividends on shares of stock (but not stocks, bonds or securities) are deductible.

25. Hobby Expenses

You can deduct ordinary and necessary expenses incurred from a hobby. Unlike a business, a hobby is specifically not meant to make a profit. If you suffer losses due to a hobby, you cannot deduct the loss from your income.

26. Investment Fees and Expenses

Certain fees you pay to manage your investments can qualify as a miscellaneous deduction. Such costs include:

  • Fees for investment counseling
  • Custodial fees, if paid for outside of the account
  • Software and online services used to manage investments
  • Safety deposit rental fees
  • Transportation costs to and from an advisor’s office
  • Attorney costs used to collect taxable income
  • Costs to replace lost security certificates

27. IRA Losses

Losses on traditional and Roth IRAs can be claimed as a miscellaneous itemized deduction if all the amounts in your accounts have been distributed to you and the total distributions are less than your unrecovered basis.

28. Repayment of Income

If you had to repay income that you included in ordinary income in an earlier year, you might be able to deduct the repaid amount. In most cases, you can only claim a deduction for repayment of income if your repayment qualifies as an expense or loss you had at your business, trade or in a transaction.

29. Legal Fees

If you itemize, you can deduct legal fees related to doing or keeping your job, collecting taxable alimony, or tax advice. You cannot deduct fees you paid to defend against charges that rose from participating in a political campaign.

30. Safety Deposit Box Rental Fees

You can deduct safety deposit box fees paid for storing taxable income-producing stocks, bonds and investment-related documents.

31. Gambling Losses

For gamblers, you might be able to recoup some of your losses. Winnings from gambling is taxable and must be reported. If you suffered gambling losses, you can deduct up to the amount of gambling income you reported. Claim your losses as a miscellaneous deduction.

32. Casualty, Disaster and Theft Losses

Losses related to your home, household items and vehicles not covered by insurance or reimbursed could be deductible.

33. Educator Expenses

K-12 educators can deduct up to $250 for any unreimbursed expenses for books, supplies, computer equipment and other supplementary materials. To qualify, you must work at least 900 hours in a school year.

34. Health Savings Account Contributions

Health Savings Accounts (HSAs) are tax-exempt accounts used to pay or reimburse certain medical expenses. As a benefit of HSAs, you can claim a tax deduction on contributions you or another individual made to your HSA.

35. Alimony

If you paid alimony in 2015 as part of a divorce or separate maintenance decree, you can deduct how much you paid. Your payments qualify as alimony if:

  • You and your spouse or former spouse do not file jointly
  • You paid with cash, check or money order
  • Your payment went to your spouse or former spouse
  • In the case of being legally separated, you do not live in the same household as your former spouse
  • Your payment is not for child support or property settlement

36. Self-Employed Health Insurance

Is health insurance tax deductible for the self-employed? Absolutely. If you were self-employed in 2015, you can deduct premiums paid for medical and dental insurance, as well as qualified long-term care insurance for yourself, your spouse and your dependents.

37. Penalty for Early Withdrawal of Savings

If you withdrew your money early from a certificate of deposit or similar bank investment, the penalty you pay could qualify among deductions for taxes.

38. IRA Contributions

Although IRS itemized deductions do not allow Roth IRA contributions, you might be able to claim the amount you put toward a traditional IRA. Get a deduction for up to $5,500 contributed to a traditional IRA in 2015. If you’re age 50 or over, you can contribute up to $6,500.

39. Personal Exemptions and Dependents

For personal exemptions and dependents, you can deduct up to $4,000 for 2015, an increase from the 2014 limit of $3,950.

40. State Balance Due

If you owed additional taxes on a prior year’s state return and paid them in 2015, you might be able to deduct the taxes paid.

41. 401k Tax Deduction

Although there is no 401k tax deduction you’ll include when you file your taxes for 2015, just by making contributions you reduce your taxable income. That’s because your pretax contributions are deducted from your taxable income when your employer issues your W-2 form.

42. Dependent Care Flex Spending Account

A Dependent Care Flexible Spending Account (FSA) lets you set aside pretax money for expenses related to caring for a child, a disabled spouse, parent or other mentally or physically handicapped dependent. You are allowed to contribute up to $5,000 pretax dollars toward a Dependent Care FSA. The amount you contribute will not be taxed on your tax return.

43. Union Dues

Among the numerous tax write-offs for 2015, union dues and expenses are included. You can deduct initiation fees and dues you pay for membership in a union.

44. Work Uniforms

If your employer requires you to wear clothes that is not suitable for ordinary wear, you can claim them as a deduction. Common items deducted include theater costumes and safety gear. Note that suits do not qualify for your list of itemized deductions.

45. Senior Tax Deduction

If you were age 65 by the end of 2015, you are eligible for an additional standard deduction.

46. Car Registration Fees

You might be able to include vehicle registration fees on your 2015 tax deductions, if you meet certain requirements.

47. Jury Duty Pay

If you gave your jury pay to your employer because they paid your salary while you served on the jury, you could deduct your jury pay from your taxable income.

48. Earned Income Tax Credit

The Earned Income Tax Credit (EITC) is a commonly overlooked tax credit for low- to moderate-income individuals. Although it is not considered an IRS deduction, the EITC is a refundable tax credit meant to supplement income. The amount you receive will range from $503 to $6,242

49. Bad Debt Deduction

If you lent money that was never repaid, you have bad debt. To deduct bad debt, you must prove that you loaned out cash or you have previously included the amount in your income, according to the IRS. You must also show that you attempted to collect the debt and that there is no chance the debt will ever be collected.

50. Home Sale

If you sold your home at a profit, you can exclude up to $250,000 ($500,000 for married filing jointly) of gains from your income.

This article originally appeared on GoBankingRates.

 

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