Your 2015 taxes are due in just a few months. It’s easy to miss all the deductions and credits that you may qualify for. Here are eight overlooked tax items. So, if you deserve these deductions and/or credits, then claim them. Don’t miss an opportunity to keep more of your money.
1. Job-Hunting Expenses. If you were unemployed in 2015 and looked for work in your current (or most recent) field, you may be able to deduct job-hunting expenses that exceeded 2% of your gross income. This includes employment agency fees, printing costs for business cards, travel costs (lodging, food, and transportation) to a new area to look for work or for an interview, and advertising costs. Hey, don’t forget about the premium LinkedIn account fee. It also includes parking charges, toll fees, and mileage you put on your car to look for work. We hope that you found a job, but even if you didn’t, you may still qualify for this deduction.
2. Student Loan Interest Paid By Mom & Dad. Good news graduates. If your parents paid back your student loan and they don’t claim you as a dependent, you can deduct up to $2,500 of student loan interest. The IRS thinks your parents gave you (their child) the money to pay back the loan. Thanks Mom & Dad.
3. Out-of-Pocket Charitable Expenses. It’s not just the goods or money that you donated throughout the year that count as deductions. You can also write off (non-reimbursed) out-of-pocket expenses that you paid for while working for a charity. For example, the ingredients you purchased to make cookies for a school fundraiser or copies you made to promote a charity auction. Plus, if you drove your car for charity, you can deduct the mileage, parking charges, and toll fees.
4. Wedding Expenses. Here’s to the happy couple. You cannot write off your entire wedding; however you might be able to deduct some of it. If you were married at a church, non-profit location, or historical site, the rental fees might be considered a charitable donation. If you donate your flowers, decorations, leftover food, and even your wedding dress to a charitable organization, you can write off the expenses. Remember, the amount of the donation is fair market value – how much someone would be willing to pay for used items – not the original price.
5. Camps, Babysitters, and Activities for Your Kids. The Child and Dependent Care Tax Credit extends beyond traditional daycare fees. If you pay for day, summer, and/or sports/activity camps or a babysitter to watch your child (must be a dependent child under the age of 13) so you can work or attend school full time, you might qualify for the tax credit. Also, if your child goes to before-/after-school care, these expenses may also qualify.
6. Moving Expenses for a New Job. Congratulations on your new job! Your moving expenses might qualify as a tax deduction. You’ll need to meet the distance and time requirements. Your new job must be at least 50 miles from your old house. You need to have worked full time for 39 weeks in the first year after you moved. If your new company gave you a moving allowance you can still deduct any moving expenses above this amount.
7. Mortgage Points. If you own a home, you’re probably aware that you can deduct the mortgage interest payments. However, many homeowners don’t realize they can deduct points or loan origination fees they paid to secure a loan for their primary residence. If you meet certain requirements, you may be able to deduct the total amount in the year you paid. If not, you can deduct the points over the life of the loan. Also, if you refinanced your current home loan, you may be able to deduct any remaining points left on your old loan.
8. Tax Credit for Low to Moderate Incomes. The Earned Income Tax Credit (EITC) helps working people with low to moderate income get back some of the Federal income tax that was taken out of their pay.The IRS stated “that millions of people miss out on the credit because they don’t claim it when filling or don’t file a tax return at all.” Since the EITC is a tax credit it reduces your tax bill dollar-for-dollar and may give you a refund. For example, if your final tax bill is a $1,000 and you have a $1,500 tax credit, you’ll receive a $500 refund. The credit amount depends on income, family size, and filing status. To help you determine if you qualify, go to www.irs.gov/eitc.
Please talk with your tax professional or visit irs.gov for more information about these deductions and credits.