6 Tax Deductions You Didn’t Know About

The tax code is extremely complex and it changes every year. Understanding the various rules and changing regulations can easily become a full-time job. There are many tax deductions that you are probably not aware of. Here are the top six deductions you probably didn’t know about.

1. Dependent Care Credit

Write off the daycare expenses by claiming this credit. It can make a huge difference on your tax bill if you have children younger than 13 years of age. The maximum deduction is $3,000 for a single child and up to $6,000 if you have two or more children. It can result in a reduction of $1200 to $2100 on your total bill.

2. Non-cash Donations

People toss useful items every day, but sending those unwanted items to the landfill is costing you money. Charitable donations of clothes, household goods and electronics make it easy to lower your tax bill. Keep track of donations throughout the year, and ask for a receipt when you drop off the bags. Apps like idonatedit make it easy to record the information, and then your tax professional can use the information to lower your bill.

3. Volunteer Expenses

You cannot write off the hours you spend helping at your favorite charity, but you can write off the miles you drive and materials you purchase. Keep track of these items and turn them over to your tax professional at the end of the year.

4. Job-Hunting Expenses

The unemployment rates are still high, but you can write those off on your taxes. While you can no longer write off clothing for job interviews, you can still write off fees for agency services, resume writing fees, and printing and mailing costs. From mileage for interviews to telephone calls, you can reduce your tax bill by keeping track of job-hunting expenses.

5. Green Home Improvements

This tax deduction has changed over the years, but it can still help you save up to $500. It is not based on income, and you can save money for installing new exterior windows, upgraded insulation, and high-efficiency appliances.

6. Contact Lenses and Medical

Write off your clear vision if you wear contact lenses or bought new eyeglasses this year. Subject to the 7.5 percent of Adjusted Gross Income guideline, this can become a valuable write-off if you have other medical expenses during the year. From doctor’s co-pays and medication expenses to your disposable contact lenses, the medical expenses you accrue during the year can help you save money when tax time rolls around.

The countless rules and regulations of the tax code make it nearly impossible for most people to deal with filing their own taxes. Simplify your life and ensure that you get every available tax break by trusting this project to the professionals. You will know that your taxes are accurate, legal, and that you will reduce the bill as much as possible.

Jennifer Glover is a freelance writer, who blogs about taxes. If you are interested in getting a bigger Tax Rebate this next year, follow Jennifer’s tips and tricks.

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Posted by Cherrell Tarantino on June 15, 2012. Filed under Business. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry