Tax Time . . . Deductions Not to Overlook!

irsBelieve it or not, as taxpayers we may overlook some seemingly obvious deductions that could save us more of our hard-earned money. Here are some of those items to keep in mind when tax time is looming. Remember, if you are ever unsure about a specific deduction, ask a trusted tax preparer, or visit www.irs.gov for more information.

Vehicle Excise Tax

If you get a bill from your state or local government charging you a tax for owning a vehicle, you may be able to deduct that tax. You can also get the tax deduction if you lease a vehicle and your finance company bills you for the tax. 

Job Hunting Expenses

It pays to save your receipts for job-hunting expenses. These expenses are deductible if they were incurred to locate a new job in the same line of work.

Real Estate Taxes

Also, don’t forget taxes you paid indirectly, such as taxes paid through a mortgage escrow account. If you bought a house, check your settlement statement for any taxes which you reimbursed the seller at the closing, too.

Cost of Tax Preparation

Tax software expenses, preparation fees, and other tax-filing expenses are all deductible on your tax return as a miscellaneous itemized expense. Be careful to deduct them on the return for the year in which you paid the costs.

Estate Tax

If the estate of the person who died was large enough to trigger estate tax, find out the amount of the estate tax attributable to the IRA distribution. This amount is tax deductible.

Capital Loss Carryover

If your capital losses are greater than your capital gains, you won’t have to pay tax on the capital gains. If you have a capital loss one year and a capital gain the next year, use your capital loss carryover to reduce your taxes in the later year.

State Tax You Paid in April with Your Return

If you owed taxes when you filed your last state return, that check you wrote could help you when it’s time to pay your next year’s taxes.

Reinvest Dividends

Often a mutual fund account is set up to automatically reinvest dividends in additional share purchases.

Credit for Excess Social Security Tax

If you worked for more than one employer during the year, look into the credit for excess Social Security tax.

Tax deductions change from year to year. Make sure you check out www.irs.gov for more info as it applies to you or your situation. Also, a great tax accountant or consultant can help you get the most deductions.

houseIf you are looking to purchase a home, getting your taxes done is a very high priority. Lenders need to see your current year taxes and last years. If you do not have them done when applying for a loan, the lender has to wait until you are able to present a tax return.

Be proactive, start getting all of your information together today.

If you are interested in buying or selling, I’d be happy to speak to you, assist you in getting prequalified or put together a comprehensive marketing plan for your home. www.sandra@MountainCharmRealty.com or 828-768-4481.

Speak Your Mind

*