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Tax deductions you should be accounting for now

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Every year, taxpayers miss out on hundreds or even thousands of dollars in tax deductions simply because they are unaware of them. While common deductions like mortgage interest and medical expenses are well known, there are plenty of hidden tax breaks that people overlook. In this article, we will explore tax deductions that can help lower your tax bill and maximize your refund.

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Many employees and freelancers spend money on work-related costs that may be deductible. Some often-missed deductions include:

  • Home office expenses for remote workers
  • Union dues and professional organization fees
  • Required work uniforms and protective gear

2. Educational Deductions

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If you or your dependents are pursuing higher education, consider these tax breaks:

  • Student loan interest deduction (up to $2,500 per year)
  • Tuition and fees deduction
  • Lifetime Learning Credit for continuing education

3. Charitable Contributions

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Donations aren’t limited to just cash. Deductible items include:

  • Mileage driven for charity work
  • Non-cash donations (e.g., clothing, furniture, electronics)
  • Expenses incurred while volunteering (such as supplies)

4. Medical Expenses

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Medical costs can add up quickly, but not all expenses qualify. Deductible costs include:

  • Travel expenses for medical treatments
  • Home improvements related to medical needs
  • Alternative treatments like acupuncture (if prescribed by a doctor)

5. Self-Employment Deductions

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Freelancers and entrepreneurs can deduct:

  • Internet and phone expenses
  • Business-related travel and lodging
  • Health insurance premiums

6. Moving Expenses

Packing.
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If you moved for work in a qualifying year, some moving costs may be deductible, such as:

  • Transportation costs
  • Storage fees
  • Temporary lodging

7. Child and Dependent Care

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Parents and caregivers may qualify for deductions on:

  • Daycare and babysitting costs
  • Summer camps
  • After-school programs

8. State and Local Tax Deductions

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Taxpayers can deduct up to $10,000 in:

  • State and local income taxes
  • Property taxes
  • Sales taxes
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Certain investment expenses are deductible, including:

  • Financial advisor fees
  • Investment publication subscriptions
  • Margin interest on borrowed investment funds

10. Retirement Savings Contributions

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Don’t forget to claim deductions for:

  • Traditional IRA contributions
  • Self-employed retirement plan contributions
  • Savers Credit for low- to moderate-income earners

FAQs About Hidden Tax Deductions

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1. Can I deduct my home office expenses?Yes, if you use part of your home exclusively for business, you may qualify for a home office deduction.

2. What’s the difference between a tax credit and a deduction? A tax credit reduces your tax bill dollar for dollar, while a deduction reduces your taxable income.

3. Can I deduct clothing expenses for work? Only if the clothing is required for your job and is not suitable for everyday wear.

4. Are medical expenses fully deductible? Only the portion exceeding 7.5% of your adjusted gross income is deductible.

5. Can I deduct professional development courses? Yes, if the education is required to maintain or improve job skills.

6. What happens if I miss a deduction? You can file an amended return (Form 1040-X) within three years to claim missed deductions.

Conclusion

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Missing out on deductions means leaving money on the table. By keeping track of eligible expenses and consulting with a tax professional, you can ensure that you are maximizing your deductions and reducing your taxable income. Start gathering receipts now and take full advantage of these often-overlooked tax breaks.

Unlocking Hidden IRS Deductions: The Tax Breaks Many Overlook

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Tax season can be an intimidating time, but understanding the deductions available to you can make a world of difference. Many people leave valuable money on the table simply because they are unaware of some of the deductions they qualify for. In this article, we’ll cover some of the lesser-known IRS deductions that could put more cash in your pocket and ease your tax burden.

READ: Unlocking Hidden IRS Deductions: The Tax Breaks Many Overlook

Author

  • Dede Wilson Headshot Circle

    Dédé Wilson is a journalist with over 17 cookbooks to her name and is the co-founder and managing partner of the digital media partnership Shift Works Partners LLC, currently publishing through two online media brands, FODMAP Everyday® and The Queen Zone.

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