Six Tax Deductions That Are Regularly Overlooked
Though we begrudge doing it, we all know that taxes are a necessary evil. But no one likes to pay more taxes than are legally required, so it is worth making sure that you never pay more of your hard earned wages than is absolutely essential. This should be obvious but you would be amazed just how many folks out there end up paying more tax than they need to do, simply through not paying attention to the tax deductions and rebates they are allowed to claim.
(1) Non-Cash Based Charitable Contributions
Should you make charitable donations to shops, businesses or anyone else, and should your donations be made up of items such as household goods, electrical goods, clothes or furniture, then you can deduct the value of those goods from your tax return. Simply make sure to get yourself full receipts for any donations, otherwise you will not be permitted to claim that deduction.
(2) Non-Standard Business Expenses
Everyone knows about the standard things to claim for when it comes to running their own business. But there are a lot of smaller, or less common expenses that people often forget to put in a claim for. These range from stationery that might be inexpensive at the time but soon adds up over a year to expenses for business related travel, no matter how short the journey. Similarly, if you work from home and you have set up a home office, then both the fixtures and fittings as well as utilities such as phone, Internet, and electricity will most likely be suitable for tax deductions.
(3) Refinancing Deductions
If low interest rates have recently tempted you into refinancing your property, then you should know that you are allowed to deduct any points which you might have to pay monthly, for the lifetime of the mortgage loan. Although this might not sound like a great deal of money, it soon adds up.
(4) The Cost of Finding Work
If you are unemployed for any of the tax year and spent time and money looking for work, then you can also claim deductions for that period. Costs associated with hunting for work can include cab fares, fees for recruitment agencies, expenses for advertising your skills, posting applications and printing resumes as well as transport, lodging and food if you have to travel a long way to look for a job. These expenses can be deducted to a limit that must not exceed more than 2% of the gross income from the job you eventually find.
(5) Payments for Health Insurance
It is possible that you can also claim for premiums on your health insurance. To do so, they would need to be within the overall expense of your medication which must be over 7.5% of adjusted gross income prior to the tax benefits kicking in.
(6) Credits for Energy Saving Improvements to your Home
If you have been doing up your house and have made repairs or improvements that will also help save energy, then you may be able to offset more than just your carbon emissions. Any energy saving measures are effectively calculated dollar for dollar. There is a $1500 cap but if you combine this with the money you are saving through energy loss reduction, this is a significant way of cutting your outgoings.
Byline: Alex Simmonds is a financial blogger and writer, regularly blogging about everything from tax reduction to how to set up an umbrella company.
