Do you itemize your deductions? Millions of Americans do, and if you use a CPA or tax preparation service, chances are good that your tax professional will make sure you claim all the deductions you are eligible for. But for many people who do their own taxes by using software such as Turbotax, overlooked deductions are a fact of life that can unfortunately cost you hundreds of dollars a year. Let’s take a look at some deductions you may be forgetting to claim on your tax returns.
1. Medicare deduction for self-employed individuals
Part B and Part D of Medicare can be deducted if you are self-employed. The good thing about this deduction is that you can take it regardless of whether or not you itemize.
2. Job hunting costs
Keep track of the money you spend to look for a job. If it isn’t your fist job, you will be able to deduct any cost that exceeds 2% of your AGI. Fortunately, those who are out of work will have a deflated AGI, and there is a good chance a decent chunk of your job hunting expenses will be deductible.
3. State income taxes
This can end up being a rather big deduction for you if you live in a state like California that has a high state income tax. On the other hand, if you live in a state like Nevada with no income tax, you won’t benefit from this deduction but you can deduce sales tax (see below).
4. State sales taxes
For people who live in states with an income tax, taking that deduction will usually be the better choice. But if your state does not have an income tax, you should opt for the state sales tax deduction. The IRS provides tables that show you how much you can deduct, depending on the state.
If you prepare your own taxes, make sure you use a reputable tax preparation software program like Turbotax. You can get a Turbotax free trial by going to the following link: Freetrialspot.com Turbotax offer.