The taxman cometh, whether you want him to or not. But savvy taxpayers can reduce their tax bill (or get a bigger refund) by taking all of their available tax deductions.
Chances are, you already know about the big-ticket ways to cut your taxes, such as taking the mortgage interest deduction and making contributions to certain retirement accounts. Those well-known income adjustments are just the tip of the tax deduction iceberg, though. There are plenty of other ways to slash your tax bill, depending on your situation. If you moved in the past year, for example, the cost of your rental truck could be deductible. So is the portion of your student loan payments that went to interest.
And then there are the even quirkier deductions. You might know you can deduct medical expenses, but did you realize that includes items, such as prescription glasses and contact lenses? You’re probably planning to deduct the cost of business trip your employer didn’t reimburse, but you might have forgotten you also can deduct the money you pay for a subscription to a trade journal.
In most cases, you’ll need to itemize to get these write-offs. And because many fall into the “miscellaneous deductions” category, the total amount you’re claiming must exceed 2% of your income before you can write off the expense. In all cases, it’s important to keep good records and to talk to an accountant or another tax expert before you claim something on your taxes. She’ll be able to review your situation and tell you whether your deduction is legitimate.
Check out these 12 deductions that might be able to save you some money on your taxes. The last deduction on the list is a nice break if you pay someone else to do your taxes.