The 20 Most Overlooked Tax Deductions – Part Two

Earlier this week we began out two part series on the blog, 20 Most Overlooked Tax Deductions. Here are the second set of ten deductions you may not be taking advantage of come tax time. Remember though, it’s always a good idea to talk to tax professional (especially if you’re self-employed). So get your printer ready and keep your receipts on hand!

• Gambling losses. Speaking of vices, did you lose big in Vegas this year? The IRS feels your pain. Since the IRS makes you pay taxes on your gambling winnings, they will also allow you to deduct some of your gambling’s losses as well.
• Natural disasters and theft. Though the IRS can’t quite make up for being a victim of a natural disaster or theft, they do allow you to claim a deduction.
• Charitable contributions. That doesn’t just mean the check you write for your local church, but everything else including the cost of ingredients for the beef stew you made for the soup kitchen down to the stamps you purchased for your child’s school fundraiser.
• State sales tax. Even though everyone has a chance to take this deduction, it makes more sense for folks in states that don’t have a sales tax. The choice must then be made between state income tax and state sales tax. Even though the IRS gives folks who live in states with sales tax a clear table of what they can deduct, that’s not always the end. You can add the sales tax you paid on a vehicle, boat, or airplane that you purchased. In some places You can even add home building materials. Check with your tax person to see what you qualify for.
• Job related. This is another category that includes numerous deductions. Things like education to improve your skills, clothing needed for work, tools, union dues, are all fair game. If you spend money out of your pocket on something work related, ask your tax person and see if you can deduct it.
• Owning a home. The deductions that fall under the category of home ownership add up, and shouldn’t be missed. Keep track of your entire home owner expenses and again, go over all of it with your tax preparer.
• Last years lost deductions. Did you not qualify for certain deductions last year because of income? Maybe a technical glitch kept you from claiming one. In most cases the IRS will let you have this year.
• Investment Expenses. Investment advisory fees, Fees for a safe-deposit box to hold investments, Margin account interest expense, IRA trustee’s administrative fees, Worthless stock or securities, as well as Theft or embezzlement losses are only some of the legitimate deductions related to investment.
• Mom & Dad. That’s right, if you furnish more than half of the support of your parents, you can claim them as dependants.
• Last year’s preparation fees. So are ready to make your tax preparer earn their money this year? Don’t forget to deduct the money they earned last year too!

Now that your armed with a wealth of information about what you may or may not be able to deduct this year, what are you going to do with it? Keep clear track of all your expenses and if you plan on taking advantage of these deductions it’s always best to have a tax person you trust to help guide you. It’s your job to make sure they have all the information, but it’s their job to make sure that information is used to your full advantage.