With tax season in full swing and many changes to already complicated tax law for 2019 tax returns in effect, it is important to be aware of commonly overlooked tax deductions and credits that you may be missing. From college expenses and student loan interest to home office deductions for telecommuters, CPA Accounting & Tax Services has outlined the 7 most commonly overlooked tax deductions and credits you won’t want to miss out on.
7 Tax Deductions You Won’t Want To Miss
1. College Student 1098T Form
Perhaps the biggest overlooked deduction occurs with not cashing in on the deduction available to college expenses. This is in large part because the form needed to obtain these credits, the 1098T, is only obtainable on the student’s college website’s individual student’s portal and is commonly forgotten due to the extra steps it takes to download.
Though it is not as easy as opening your mailbox, it is worth the extra steps to get the extra credits that are available. Under the American Opportunity Credit, 100 percent of the first $2,000 spent on qualifying college expenses is covered, plus 25 percent of the next $2,000. This maxes out at $2,500 per year for up to four years as long as your annual income stays below $80,000 if you are filing single or $160,000 if you’re married and filing jointly while you are in college. in school.
2. Job Search Expenses
If you spent money as part of a job search, you can write off the money you spent in pursuit of a job, including transportation, food, lodging, printing costs for resumes, business cards, etc. as well as any employment agency fees. However, you are only eligible for this deduction if the new job you are looking for is in the same line of work as your last one. If this is your first job or you are looking to switch careers, you are not eligible for this deduction.
3. You Live In a State With No Income Tax
CPA Accounting & Tax Services is Orlando, Florida based but we service clients all around the world. If you live in a state with no state income tax, like Florida and you choose to itemize your income taxes, you can choose between deducting paid state income taxes OR state sales taxes. If you live in a state with no income tax, you would want to pick the state sales tax option, obviously. If you don’t live in a state with no income tax, you will want to choose whichever option works out in your favor.
4. You Work From Home
With telecommuting becoming common place, claiming your home office on your taxes is overlooked for fear of miscalculation leading to an audit. You can take the “safe harbor” option, which lets you multiply the square footage of your home office by $5 (up to a max of $1,500) or you may itemize your home office out. With either option you must be able to prove that your home office is your principle place of business and used exclusively for business purposes.
5. You Work From Home
With telecommuting becoming common place, claiming your home office on your taxes is overlooked for fear of miscalculation leading to an audit. You can take the “safe harbor” option, which lets you multiply the square footage of your home office by $5 (up to a max of $1,500) or you may itemize your home office out. With either option you must be able to prove that your home office is your principle place of business and used exclusively for business purposes.
6. You Made Home Improvements & Then Sold Your House
This little nugget can save you thousands in capital gains taxes. If you made upgrades to your home that increased its value, the value of the improvements becomes a tax deduction when you sell it, reducing your gain on the sale price and lowering your capital gains tax.
7. Stocks and Bonds
Even if your stocks and bonds produce dividends and no cash was received, they still must be claimed on your tax return. Additionally, the sale of securities and any re-investments are often forgotten and individuals forget to claim the sale of these investments They produce gains and many times losses that will help lower tax liability.
Knowing what tax deductions you qualify for requires an expert. Contact the professionals at CPA Accounting & Tax Services to help guide you through tax season and beyond. We specialize in Business Accounting Services, Individual Tax Services, International Tax Services and Tax Resolution Services. We have offices in Orlando, Florida and service clients worldwide. Find out how we can serve all of your accounting needs by contacting us today: www.cpaaccounting.biz