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7 Easy-to-Miss Tax Deductions

7 Easy-to-Miss Tax Deductions

Most tax filers take advantage of the standard deduction provided to all individuals to lower their adjusted gross income and minimize their tax burden. There are however a number of other deductions and credits which can be easily missed but help significantly especially for those who have children, are in the military or looking for employment. Hopefully, some of the following deductions and credits apply to you and can save you money on your taxes.

1. Job Seeking

If you relocated to a new city or town for job, you may be able to deduct the moving expenses if it is greater than 50 miles from your home. There are also a number of deductions available for people seeking employment such as printing business cards and resumes. Like most deductions, there are requirements such as the job you're seeking must be in the same field and the total expenses from seeking employment must be greater than 2% of your adjusted gross income.

2. Medical Expenses

Many tax filers rarely deduct medical expenses due to the complications of keeping track of what bills have been paid and what qualifies as tax benefit. If however your medical bills are greater than 7.5% of your adjusted gross income, it is probably beneficial to itemize your deductions and claim these expenses. The self-employed also have the option to deduct 100% of their premium costs as long as the business made a net profit and they are currently not covered under another medical plan.

3. Education

If you have student loans from attending college, you can deduct the associated loan interest up to $2,500. You can also deduct tuition and fees up to $4,000 as long as the total amount is greater than 2% of your adjusted gross income. Also, check to see what if any education credits are currently offered such as the Lifetime Learning Credit in the American Opportunity credit.

4. Child Care

If you have a child under 13 years of age or a spouse either of which is mentally or physically incapable of self-care you may qualify for the Child and Dependent Care Credit. Total benefits are a maximum of $6,000 for two dependents under the guidelines but review the documentation to see if you qualify since it can help offset expenses incurred from taking care of a loved one.

5. Charity

If you gave to charity you may be able to claim charitable deductions of gifts such as stock, personal property and cash. If the amount given to a qualifying charity is greater than $250 you will need to provide proof such as bank records or receipt from the organization in question. The IRS provides additional information with '8 Tips for Deducting Charitable Contributions' at its website.

6. Military Service

Military service people have a special Earned Income Tax Credit applicable to those serving in active combat. If you're a member of the Armed Forces you do not have to report your nontaxable military pay as earned income for the EITC. The Basic Allowance for Housing and the Basic Allowance for Subsistence are also nontaxable when in combat. More information is provided at the IRS website on the 'Special EITC Rules' page.

7. Retirement

Contributions to a qualified Individual Retirement Account or employer sponsored retirement plan are often tax-deductible and lower your adjusted gross income and subsequent tax burden. There are additional benefits such as the Retirement Savings Contribution Credit or Savers Credit which allow you to claim a 50% credit if certain qualifications are met based on income and age.

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